Reliance Jio, Bharti Airtel, and Vodafone Idea lost many subscribers in August due to a big price increase in July, as reported by TRAI. Following the Jio Tariff Hike, the company reported a loss of 4.01 million users, according to TRAI. Airtel lost 2.4 million, and Vodafone Idea lost 1.8 million. Meanwhile, BSNL gained 2.5 million new users. However, there’s now hope on the horizon as private telecom companies push for government reforms to ease their financial burden. If successful, these reforms could lead to more affordable recharge plans, potentially reversing the recent price increases.
Here’s Why Your Jio, Vi And Airtel Could Roll Back Tariff Hike
The Cellular Operators Association of India (COAI), representing companies like Jio, Airtel, and Vi, has formally requested the government to lower the license fee. Currently, telecom operators pay 8% of their total revenue as a license fee, which includes a 5% network obligation charge. The COAI proposes reducing this fee to between 0.5% and 1%, arguing that lower fees would allow companies to invest more in network upgrades and technological expansion. Many consumers reacted to the Jio Tariff Hike by switching to other providers like BSNL, which gained new users. However, with reforms, users will benefit as they don’t have to change their provider.
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According to COAI, the current high license fee is outdated. Previously, it was tied to spectrum costs, but since 2012, spectrum allocation has been handled through a transparent auction process. If changes are made, the Jio Tariff Hike and of other telecom operators could potentially be reversed, bringing relief to subscribers. COAI now believes the license fee should only cover administrative costs, as the original justification is no longer valid.
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Telecom Operators Struggle with High Operating Costs
The COAI claims that high operating costs, including Adjusted Gross Revenue (AGR) payments, Corporate Social Responsibility (CSR) contributions, Goods and Services Tax (GST), and corporate taxes, are hindering telecom companies’ ability to grow and improve services. COAI Director General SP Kochar explained that reducing the license fee could ease the financial strain, enabling telecom providers to focus on innovation and technology.
A reduced license fee could also benefit consumers by making recharge plans more affordable. With lower operating costs, telecom companies may be able to reverse recent tariff hikes, leading to cheaper recharge options for customers.
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If the government agrees to reduce these costs, telecom operators may reverse the price hikes they implemented earlier this year. The recent India Mobile Congress highlighted the financial pressures on telecom companies, as officials from Jio, Airtel, and Vi argued that high fees limit their competitive edge compared to other sectors. So, lowering the Jio Tariff Hike can lead to a significant impact on its subscriber base. It could result in more affordable plans for users and a more robust network infrastructure across the country.
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