Vodafone, Airtel, Jio tariff hike good for customers, to boost govt revenue, says COAI

Rise in price of mobile calls and internet rates is beneficial for customers, will boost government revenue collection and help in creating jobs by improving financial health of sector, telecom industry body Cellular Operators Association of India said on Monday.

Telecom operators Bharti Airtel and Vodafone Idea have anunced to raise mobile calls and internet prices for prepaid customers by to 50 per cent from December 3, while Reliance Jio has said it will roll out new plans with 40 per cent higher rates on December 6. 

"This (rate hike) is going to be in benefit of customers, government and industry. From customers' perspective, se tariffs will enable operators to do required and necessary improvements in telecom network which has been languishing because of financial stress in sector. In upcoming short period, we should begin to see improvement in customer experience and services," COAI Director-General Rajan Maws said.

This is first hike in past five years in country's telecom that was facing tariff war, with voice calls becoming almost free in 2016 and steep 95 per cent fall in data prices to Rs 11.78 per GB at present from Rs 269 per GB in 2014.

From Tuesday, customers of Bharti Airtel and Vodafone Idea will have to shell out a minimum of Rs 49 to make calls, access internet on mobile and stay connected for four weeks.

Maws said that due to a decline in mobile services rates, government revenues have also declined. 

"We believe this will help government in its collection at a time when collections of government are being challenged," he said.

According to official data, telecom sector's gross revenue fell about Rs 41,000 crore in three years on account of a dip in mobile services rates.

telecom sector's gross revenue in 2016-17 was Rs 2.65 lakh crore, which had reduced to Rs 2.46 lakh crore a year later and n to Rs 2.24 lakh crore in 2018-19.

Adjusted gross revenue, on which government earns revenue, also declined by around Rs 46,000 crore during same period.

Maws said industry has been in doldrums and hike in tariff will bring needed financial wherewithal to enable m to make investments.

He said Prime Minister Narendra Modi's vision of Digital India requires over USD 100 billion worth of foreign investments into country and new tariff will help sector in attracting foreign funds and help domestic banks in lending to industry.

"This will help operators to begin to hire again. We have been losing employees because of our inability to retain m. Also, because several of operators have exited business. With this particular move, we see financial health improving. This means better remuneration for employees, better purchasing power to m," Maws said.

Telecom Sector Skill Council CEO Lt Gen S P Kochhar said hike in tariffs will provide companies to invest in expanding optical fibre network and rolling out telecom networks. 

"As per our estimates, four persons at every gram panchayat level will be required to maintain telecom networks. Laying fibre is a must for country and it will create jobs on ground. However, in long term, we see a need for high-end jobs in telecom sector and most of manual jobs will eir be automated or outsourced," Kochhar said.

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