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Coronavirus Outbreak: Telcos Might Not Increase Tariffs

In order to help the customers, telecom operators are offering many benefits, despite the fact that they are going through a very rough phase. Now, it has been reported that operators might delay the second round of price hike.

“If concerns around Covid-19 lead to a material impact on consumers’ ability to spend (especially daily wage laborers), then we see risks of tariff hikes being pushed back and magnitude being lower,” brokerage firm BofA Global Research said in a report.

The report said that recently operators have increased the prices by 40 percent, and now they are planning for another hike. But, that seems a bit difficult due to the COVID-19.

“While tariffs are well below other markets and where they should be for operators to make a reasonable return on capital, considering the Covid-19 impact and the ongoing floor tariff consultation, operators may avoid tariff hike in the near term,” said Kunal Vora, Senior Analyst, Consumer, Media and Telecom, BNP Paribas India was quoted by ET.

However, the telecom regulator is planning to come up with floor pricing. But, that might delay too, as TRAI has stopped doing all open house discussions for the time being. “If TRAI goes by telcos’ suggestions on a floor (even the lowest limit of Rs 15) and gives an order soon enough, the first thing would be compliance,” another analyst close to the development said.

It is worth mentioning that the operators were planning to raise tariffs in the first half of this year, as they wanted to increase their ARPU by Rs.300 by the end of the next year, that’s why they’re likely to raise tariffs by 40 percent this time. In fact, there are chances that operators will opt for another hike in the first half of the next year.


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