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    BSNL to also go in for tariff hike next month

    Synopsis

    Owing to a tariff hike by Reliance Jio in its voice and data packages, rival companies Vodafone idea and Airtel said they would increase tariff with effect from December this year. State-owned BSNL has also reviewed its plans and is set to raise prices from December, 2019 to beat sectoral stress.

    bsnl-agenciesAgencies
    New Delhi: State-owned Bharat Sanchar Nigam (BSNL) is reviewing its mobile tariff plans and will raise prices from December 2019, following the hikes announced by private telecom carriers.

    “We are presently examining our voice and data tariff and will increase it from December 1, 2019,” a senior BSNL official, who does not wish to be identified, told ET. However, the person didn’t elaborate on the quantum of the proposed hike but added that it would be conveyed to the subscribers in the coming weeks.

    Earlier this week, Vodafone Idea and Airtel said they would increase tariff with effect from December this year following sectoral stress. The move by the two telcos was followed by their arch-rival Reliance Jio, which on Tuesday said that it would also raise its tariff in the next few weeks if directed by the regulator.

    In October, the Centre cleared a Rs 74,000-crore revival package for the two loss-making public-sector telecom companies BSNL and Mahanagar Telephone Nigam, but analysts said it might not be enough to make the two competitive.

    A tariff hike, however, would help the ailing state-run telco bring in additional cash flows at a time when its revenues are on a continuous slide due to unavailability of fourth generation services, said analysts.

    “It will not be a bad move from the consumer perspective. Since Jio’s entry in 2016, tariff and industry revenue were down,” said Rajiv Sharma, head of Institutional Equity Research, SBICAP Securities.

    The state-controlled telco had been forced to cut rates to be competitive since Jio’s disruptive foray in September 2016 to retain its subscribers.

    According to the sector regulator, BSNL added 7.37 lakh new users in September this year, taking its total consumer base to 11.69 crore. Against this, Vodafone Idea and Bharti Airtel have together lost nearly 49 lakh subscribers in the same month.

    Meanwhile, the government said on Wednesday that the merger of BSNL and MTNL is likely to be completed in 18-24 months.

    The government has earlier said that till the completion of the merger, MTNL will operate as a subsidiary of BSNL.

    Both the debt-ridden telcos have rolled out voluntary retirement scheme (VRS), which is open for employees till December 3.



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