Mobile Bills may increase as per SC’s Verdict on AGR

Mobile Bills may increase as per SC’s Verdict on AGR

On September 1,Supreme Courts verdict came on AGR dues. The telecom operators now have 10 years to clear their pending payments.

However, Bharti Airtel has cleared 41% of its dues, Rs.26000 Crore still pending. Whereas, Vodafone Idea is yet to pay around 87% of its dues, i.e., Rs 50,400 Cr.

As per a report by ET Now, The annual payout for the latter is expected to be Rs 5,500-6,000 Crore. The experts believe that raising tariff may be the need of the hour for the entire sector to become more viable.

THE REVENUE MATH

Q1FY21

Telco                ARPU

Airtel                Rs 157

Jio                    Rs 140.3

Vodafone Idea Rs 114

(report by Times Now)

Notably, India has one of the world’s lowest internet charges which cause poor ARPU (Average Revenue Per User) for telecom players.

According to data by Visual Capitalist, the average cost for 1GB data is $0.09 in India whereas its $8 in the United States and as high as $10.94 in South Korea.

During a discussion on India Development Debate with Tamanna Inamdar, Sanjay Kapoor, Former CEO, Bharti Airtel and Former Chairman Micromax, It was discussed that the internet isn’t limited to connectivity and entertainment only. Its a need of the hour and even jobs aren’t possible in today’s time without proper internet connectivity especially the ‘work from home’ trend which in now running globally.

“If technologies are going to change every 4-5 years then how do you expect anybody to absorb that over 10-year depreciation, it’s not going to work. If the customer doesn’t pay the price then the government should probably subsidize”, Sanjay Kapoor adds.

Industry ARPU is expected to grow by around 5%-10% in FY21, as users upgrade gradually to higher-tariff 4G price plans.“Bharti believes industry monthly ARPU needs to grow to around Rs 200 and eventually to Rs 300 for a sustainable business model”, the Fitch Ratings said.

Revenue and EBITDA growth at Indian telcos in the financial year ending March 2021 (FY21) will slow due to lower data growth and weaker economic activity amid the Corona virus pandemic, says Fitch Ratings.

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