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Airtel postpaid and prepaid plan prices to go up from December, company says it has to keep business viable

Hours after Vodafone Idea said it would increase prices, Airtel made similar statement. The company said that prices of its phone services will go up from December.

Airtel on Monday evening announced that it would increase the prices of its services from December. Airtel’s announcement comes hours after Vodafone said something similar, although Vodafone Idea gave a specific date of December 1 after which the prices of its services will go up.

In other words, consumers who use Airtel or Vodafone Idea services, whether they are on postpaid plans or are using prepaid plans, should be willing to pay slightly more for the services from these two companies. The Vodafone Idea and Airtel price hike comes weeks after Jio had also increased the effective tariff for its users, asking them to pay extra for cellular calls.

"Airtel will increase price offerings in the month beginning December," an Airtel spokesperson said. "While continuing to provide affordable tariffs to customers, it would balance the needs of the company to remain viable and thereby continue to invest in the much needed digital infrastructure and maintain the quality standards required by our customers."

The company highlighted that "the telecom sector is highly capital intensive with fast changing technology cycles that require continuing investments."

The price hike announcement from Airtel and Vodafone comes a few days after the two companies declared massive loss for the last quarter. The loss for both is almost entirely due to the AGR payment that the two companies have been told to make to the government. The order to pay collectively the two companies have to pay nearly Rs 80,000 crore came from the Supreme Court a few weeks ago.

Order asking Vodafone and Airtel to pay AGR dues has put the viability of the continuing operations of the two companies in danger. Vodafone CEO after the order even said that the entire value of the Vodafone’s stake in Vodafone Idea business has been now reduced to zero. He said that the business in India was no longer viable, media reports noted. Though, later the company clarified that statement of its CEO was misrepresented and that the company was not looking to leave India.

Both Airtel and Vodafone have appealed to the government to change the terms and conditions regarding payment of AGR dues but so far the government hasn’t made any public announcement.

Currently, from the statements of Vodafone and Airtel it is not clear how much prices will go up for the prepaid and postpaid plans from the two companies. It is also not clear if Airtel will also increase the prices of its broadband services or if the price rise is limited to Airtel postpaid and prepaid plans.