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.
“But ARPUs haven’t increased in line with usage and customer ability to pay higher is already established," it said.
“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.”
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.”
