Why Vodafone-Idea Needs To Raise Tariffs Of Prepaid Plans?

The survival of Vodafone-Idea has become the talk of the town due to its worsening financial crisis. The telecom operator has increased postpaid tariffs to increase ARPU, but still, analysts believe that it needs to raise the prices of prepaid plans to increase cash and market share in the industry.

Vodafone-Idea Changes In Postpaid Plans

Notably, the company has made changes in corporate plans and added two new postpaid plans in its RED X Family. "Vi has raised tariffs for a few plans, meaningful ARPU improvement will require it to increase tariff for prepaid 4G customers offering a significant daily data allowance," Edelweiss Securities was quoted by ET.

Apart from postpaid plans, Vodafone-Idea removed its entry-level plans in 14 circles and now, its plans start from Rs. 79. Besides, the company has also hiked the prices of the corporate postpaid plan of Rs. 299.

However, analysts said that these segmented changes are not enough to improve the Vodafone-Idea situation. The company was planning to raise Rs. 25,000 crores to clear its dues and to improve its financial situation in the telecom industry.

On the other hand, some industry experts believe that increasing tariffs is not going to be easy for Vodafone-Idea as Airtel is already raised tariffs of a few plans. So, this might affect Vi's subscriber base, which means the telco needs to do take a decision after calculating its implications on the business.

Reliance Jio Upcoming Smartphone

Additionally, Vi needs to think about Reliance Jio's upcoming smartphone, which is expected to be priced at Rs. 3,499. Notably, the company has developed a new smartphone with Google and is likely to go on sale on September 10, 2021.

It is worth noting that the telecom operator is losing subscribers every quarter. In fact, Vi lost 12 million users in Q1 of this financial year. Besides, the telecom operator is not investing heavily in network and 4G services due to financial constraints.

These issues are impacting the Vodafone-Idea user base as customers want the network to make calls and the telco has stopped investing money on the same, which is why we believe that its users are moving towards Reliance Jio and Airtel.