Vodafone Idea's Bold Tariff Strategy: Balancing Investment and Connectivity

Vodafone Idea is advocating for higher tariffs for heavy data users to improve industry returns and connectivity. The company is investing Rs 55,000 crore in network expansion, facing financial challenges with Rs 70,320 crore AGR liabilities, and seeking government relief. Despite subscriber losses, it's optimistic about future recovery.

A senior official from Vodafone Idea (VIL) has called for tariff hikes, arguing that subscribers using more data should pay more. This, he says, will help the industry generate reasonable returns and provide connectivity to all societal segments.

During the VIL earnings call for Q2 ending September 30, 2024, CEO Akshaya Moondra highlighted the swift recovery of subscribers lost to BSNL following a recent tariff increase. He emphasized that heavy investments are crucial for supporting new technology and burgeoning data use while ensuring tariffs remain affordable.

The financially-strained telecom firm, grappling with Rs 70,320 crore in adjusted gross revenue liabilities, seeks relief to alleviate investment constraints. Despite a narrowing loss in Q2, VIL reported decreased subscriber numbers, with plans for major network investments funded by equity sales and additional bank loans.

(With inputs from agencies.)