AGR Row: No More Cheap Data And Free Calls From December

The days of cheap data and free calls are about to get over, as telecom operators are all set to introduce new tariffs plans from December. The announcement comes at that time when almost all telcos are facing a huge financial crisis. While Airtel and Vodafone Idea is all set to introduce new prices from the first week of December, it is expected that Reliance Jio is likely to announce new prices in the coming days.

However, the amount of these hikes is not clear, as the operator refused to divulge the exact details on the same. But it is expected that both the voice calls and the data prices are going to dearer by 20 to 30 percent.

"The tariff hike in the first round could be higher, probably more than 20 percent, because that window is there. They would want to raise tariffs as quickly and as much as possible in this round itself," Naveen Kulkarni, Head of Research at Reliance Securities was quoted by Economic Times. Adding to that, " From an overall perspective, tariffs need to go much higher from where they are right now, probably 50 percent or so, for the industry to start delivering meaningful numbers."

On the other hand, the industry believes that there will be two rounds for the same. Initially, telcos will increase the prices, and later on, TRAI will take a call on the tariffs.

This development comes after the Supreme Court ruled against telecom operators on the adjusted gross revenue (AGR) issue. Under this ruling, all operators except Reliance Jio have to Rs. 1.33 lakh crore by January 2020. Notably, both major operators Airtel and Vodafone Idea have already expressed that this will affect their business in the country. In fact, Airtel has already moved to Supreme Court for modification in the ruling.

For the unaware, the definition of AGR has always been a bone of contention between the government and telecom operators. Telcos are required to pay spectrum charges and license fees to the government, in the form of revenue share.

But DOT said that this will include all revenue earned by telcos --including all resources such as the sale of assets and deposit interest. However, telcos argued that it should only include the revenue from its services, not from those assets. The bottom line is consumers may have to say goodbye to cheap data and free voice calls.