Calling and using mobile Internet can be expensive from April 1: Know why

 There is an important development coming out from telecom companies, which says,  your phone tariffs are set to get costlier soon! This includes talking over phone and data plans. It is learnt that telecom companies are planning to increase tariff plans from the coming months.  If this happens talking over the phone and using mobile internet will become expensive from April 1. 

As per updates from Investment Information and Credit Rating Agency (ICRA) report, companies are planning to once again increase tariffs to increase their revenue in the coming financial year 2021-22 starting from April 1. However, no information has been disclosed about how much the tariffs will be increased.

The ICRA report has said that the increase in tariff and upgrade of customers from 2G to 4G can improve average revenue per user (ARPU). It has also suggested that by the middle of the year, it can be around Rs 220. The increase in tariff will also help the industry’s revenue from 11% to 13% for the next 2 years and operating margin by about 38% in FY 2022.

Though a number of sectors were affected by the coronavirus pandemic, but the epidemic did not have much impact on the telecom industry. Moreover, the situation improved due to data usage and tariff increase in the lockdown. Notably, data usage increased due to online classes and work from home for employees.

Even though the total adjusted gross revenue (AGR) outstanding on telecom companies is Rs 1.69 lakh crore, only 15 telecom companies have paid only Rs 30,254 crore. Airtel owes about Rs 25,976 crore, Vodafone Idea owes Rs 50399 crore and Tata Teleservices about Rs 16,798 crore. Companies have to pay 10 per cent in the current financial year and the remaining amount in the following years.

Meanwhile, India on Wednesday offered telecom and networking equipment companies incentives worth 12,195 crores to boost local manufacturing, seeking to cut the nation’s massive dependence on imports of such gear.

The production-linked incentive (PLI), finalised after consultations with companies and other stakeholders, will reduce the country’s imports of telecom equipment worth over 50,000 crores, Ravi Shankar Prasad, minister for telecom, electronics and information technology, told reporters after a meeting of the Union cabinet.

India, which imports 85% of its wireless telecom equipment, is currently preparing to roll out fifth-generation, or 5G, telecom services that will require telecom operators to make heavy investments in network infrastructure. The incentives, along with local demand, are expected to draw foreign companies to set up manufacturing units in India.

The government had in November offered incentives worth 1.46 lakh crore to 10 sectors, including for manufacture of automobiles and solar panels, after the success of the scheme for the production of mobile phones launched in April 2020.

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