Vodafone Idea gains 3% as management says may hike mobile services rates

Vodafone Idea

NSE 1.37 % added 2.7 percent in early trade Tuesday after the beleaguered telecom operator said that it may raise mobile services rates this year but will gauge market reaction to the increase in tariff that the company made in November, according to a top official of the company.

The company’s scrip climbed to a high of Rs 11.25 as against Rs 10.95 at the previous close on the National Stock Exchange.

During an earnings call after the release of October-December results, Vodafone Idea MD and CEO Ravinder Takkar said that the minimum price of Rs 99 set by the company for about a month-long service is not an expensive proposition for those who are using 4G services, PTI reported.

“We would expect that it is possible that there could be another price hike in 2022 but certainly at some point the price hike will take place. The last one was almost 2 years earlier which I believe is a bit long. We certainly would expect less than two years but in 2022 we will have to see how quickly these prices get embedded. Probably, it could be 2023 as well,” Takkar was quoted as saying in PTI’s report.

VIL’s subscriber base declined to 24.72 crores from 26.98 crores in the year-ago period because of the increase in services rate by the company.

Despite the tariff hike, its average revenue per user (ARPU) declined by about 5 percent to Rs 115, compared to Rs 121 in the same quarter of 2020-21, PTI’s report said

Vodafone’s shares shed 5 percent on Monday following a lackluster performance in the December quarter.

The telecom major’s consolidated losses for the quarter ended December expanded to Rs 7,230.9 crore from Rs 4,532.1 crore compared to the corresponding quarter last year.

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