Telecom services and internet usage will be expensive from April 1, telecom companies ready to increase rates

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Harleen Kaur Grewal

Pune, February 17, 2021: Talking to mobile and using the internet is going to lighten everyone’s pockets very soon. Telecom companies are set to increase rates from April 1 this year. Also, rates may continue to increase beyond that, ICRA report revealed.

During the Corona Crisis and especially in the lockdown where the troubles of other areas increased, average revenue per user (ARPU) on the average revenue of telecom companies has improved. However, this is not much, given the increasing expenses of companies. Companies are preparing to compensate for this by increasing the telecom service rates. Earlier, last year also some telecom companies had increased their rates.

The total AGR outstanding is Rs 1.69 lakh crore. At the same time, 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 repay 10 percent of the amount in the current financial year and the remaining amount in the subsequent years.

According to the ICRA report, the average revenue per customer could also improve due to an increase in rates and upgrade of customers from 2G to 4G. This could be around Rs 220, which will increase the revenue of the telecom industry by 11 to 13 per cent in the next two years, while the operating margin will increase by about 38 percent after that.

Companies will put the burden of AGR on customers, according to the report, the cash flow of telecom companies has improved. Apart from this, the reduction in capital expenditure will also reduce the need for external debt for regular functioning. However, debt along with adjusted gross revenue (AGR) liabilities and 5G spectrum auction will put pressure on the telecom companies. Experts say that in such a situation companies can put their burden on the customers.