Vodafone Idea Sees Subscriber Port-Outs After Tariff Hike
Aug 13, 2024 21:55
Vodafone Idea CEO Akshaya Moondra says the telco is witnessing a rise in subscribers porting out to BSNL after recent tariff hikes. He believes the trend may not be sustainable due to VIL's 4G coverage.
Illustration: Dominic Xavier/Rediff.com
New Delhi, Aug 13 (PTI) Telecom operator Vodafone Idea (VIL) on Tuesday said it is witnessing a rise in subscribers port-outs to BSNL after recent tariff hikes and closely monitoring the situation.
Speaking at the company's Q1 earnings call, VIL CEO Akshaya Moondra said he is of the view that quick decisions to port out taken purely on the basis of tariff action may not eventually sustain, given the 4G coverage offered by VIL.
In July, Vodafone Idea raised tariffs by 11-24 per cent, joining larger rivals in effecting an industry-wide tariff hike. State-owned Bharat Sanchar Nigam Ltd (BSNL), however, has not increased its tariffs.
Asked about the impact of the recent tariff hikes on the ground, Moondra said while it is still early days to draw a conclusion about SIM consolidation. However, given that the entry price increase, this time, has been minimal, the SIM consolidation could accordingly be relatively lesser.
"One of the trends we have seen is that the port out to BSNL has generally risen from pre-tariff increase levels which is a space we are watching...and the reason for that is because they (BSNL) has not increased their tariffs so there is a fair amount of arbitrage," he said.
The VIL CEO was quick to add that he believes any decision to port out purely on the basis of tariffs may not sustain.
"We are watching this space - our expectation is that customers who are used to having good coverage and experience of 4G coverage, probably current offering of BSNL may not be to that extent...as people who may have taken a quick decision in terms of tariff actions...may most likely come back. But we will keep on watching this space and see what needs to be done," he said.
In VIL's Q1 FY25 release on Monday, Moondra said that the recent tariff intervention is a step in the right direction for the industry to move towards better return on investment, as well as to improve cash generation to support the large investment requirements.
"However, further tariff rationalisation is needed for the industry to fully cover its cost of capital," he had said.
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