Vodafone Idea Backs A Tariff Hike Across The Market, Plans To Expand 4G Coverage In 17 Circles
The telecom operator plans to expand its 4G coverage and capacity for enhanced consumer experience and to further assist the launch of its 5G network.
Vodafone Idea Ltd. has backed a tariff hike across the market, as it would help generate reasonable returns and support further investments.
The telecom operator last hiked its India tariff in November 2021, it said in an investor presentation on Friday.
The presentation highlighted that there is a major scope for growth of average revenue per user—the key metric for profitability of a telecom operator—as usage has increased drastically. “But ARPUs haven’t increased in line with usage and customer ability to pay higher is already established," it said.
In an exclusive interview with NDTV Profit last month, Akshaya Moondra, the company's chief executive officer, said a significant correction is needed “from where we are now to reach a level where the cost of capital is covered”.
“We need to assess the current level of ARPU and the ARPU required to reach the cost of capital,” he said. “The gap between these figures is much greater than 20% currently, so a 20% tariff correction will not suffice.”
India's third-largest telecom provider also plans to expand its 4G coverage and capacity, which will help to improve consumer experience and further assist the launch of its fifth-generation, or 5G, network.
The company plans to focus on 17 circles to improve competitiveness in the markets, according to the presentation. Its recent Rs 18,000-crore follow-on public offer was launched in the price band of Rs 10-Rs 11 and remained open between April 18 and April 22. The shares got listed on April 25.
Shares of Vodafone Idea closed 0.23% lower at Rs 13.19 apiece, as compared with a 0.98% rise in the benchmark S&P BSE Sensex.
