Vodafone Idea CEO Justifies Shorter Tariff Hikes

New Delhi, Feb 12 (PTI) Vodafone Idea CEO Akshaya Moondra on Wednesday said that current return on capital metrics in Indian telecom sector justifies shorter, even nine-month time gap between two rounds of tariff hikes, against an "ideal" 12-month duration between two such rounds.

The comment assumes significance as the three private operators in India -- Reliance Jio, Bharti Airtel and Vodafone Idea -- had raised tariffs in July last year.

During post-earnings call, the VIL top boss said that given where the industry is today, the faster tariff change is probably "a possibility" and "the need of the hour".

"In a normal scenario, I would have said that a time gap of one year is ideal between two tariff increases. However, I would add to that, that given the place where the telecom industry in India is today...where the return on capital is...whether you take the market leader or you take anyone else...nobody is returning their cost of capital. And in that scenario, I would say it is fairly justified...if it can be faster, it could be nine months also I would say," Moondra said in an analyst call.

He added: "I would say in a normal situation, a 12-month period is ideal to make any changes on tariffs. But given where the industry is today, the faster tariff change is probably a possibility, and the need of the hour."

Moondra also expressed optimism that a solution for the adjusted gross revenue issue will be found.

"...as we have been saying that post dismissal of curative petition where judicial route was closed...we have been actively engaged with the government to find a solution. As far as conversion is concerned, it is a part of the reforms package. And so while I understand it is at the government's option, but the fact that the reforms package in 2021 it was provided that the conversion could be done...after the moratorium of period of four years...that clearly shows the intent...government has provided that in the reform package to support the industry, where this need arises," he said.

Government, he said, is very cognizant of the fact that support is needed this time.

"...We have made investment, we have started the investment cycle. We are seeing positive results coming out of that. And government is actually the largest stakeholder in this entire exercise. So they are cognizant of this fact. And I am confident that they will find a solution," he said.

Vodafone Idea on Tuesday reported narrowing of losses to Rs 6,609.3 crore during the December quarter, as the debt-laden telco clinched a sequential rise in ARPU.

The revenue from operations stood at Rs 11,117.3 crore during the quarter, over 4 per cent higher than the corresponding period last year.

VIL, in its Q3 earnings release, had said the commercial launch of its 5G services in Mumbai is planned for March 2025 and Delhi, Bengaluru, Chandigarh, and Patna for April.

On a consolidated basis, the loss for the quarter was Rs 6,609.3 crore as against Rs 6,985.9 crore in the year-ago period.

Customer ARPU (average revenue per user) -- a key metrics for all telcos -- for the third quarter of the current fiscal year stood at Rs 173, up from Rs 166 in the July-September period.