Vodafone Idea Faces Subscriber Exodus to BSNL After Tariff Hikes, CEO Akshaya Moondra Cites 4G Coverage as Key Factor
Vodafone Idea (VIL) has noticed an increase in the number of subscribers switching to BSNL after the recent rise in tariffs, according to the company’s CEO, Akshaya Moondra. During the Q1 earnings call, Moondra mentioned that while some customers are quickly choosing to switch based on the new tariffs, this decision might not last long, considering the 4G coverage offered by Vodafone Idea.
In July, Vodafone Idea raised its tariffs by 11-24%, following the lead of other major telecom companies in the industry. However, state-owned Bharat Sanchar Nigam Ltd (BSNL) has not increased its tariffs.
When asked about the impact of the recent tariff hikes, Moondra explained that it’s still too early to determine the full effect on SIM card consolidation. He pointed out that since the entry-level price increase this time was minimal, the resulting SIM consolidation could also be smaller.
Moondra observed that there has been a rise in subscribers switching to BSNL since the tariff hike, mainly because BSNL has not raised its prices. This has created a noticeable price difference, making BSNL more attractive to some users.
However, Moondra believes that decisions to switch purely based on tariff differences may not last. He emphasized that customers who are used to the quality of 4G coverage provided by Vodafone Idea may find BSNL’s current offerings lacking. These customers might eventually return to Vodafone Idea after realizing the difference in service quality.
Moondra added that Vodafone Idea is closely monitoring the situation and will make necessary adjustments if needed. In the company’s Q1 FY25 report, he stated that the recent tariff increase is a positive step towards better returns on investment and improved cash flow, which are crucial for supporting the industry’s large investment needs.
However, Moondra also stressed that further adjustments to tariffs are necessary for the telecom industry to fully cover its capital costs.
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