New Delhi, July 06, 2020.
Tariff hike in the telecom sector is “inevitable” as the current structure does not allow reasonable returns for operators, although a lot would depend on the timing given the “unprecedented” scale of the COVID-19 pandemic and resultant affordability crisis.
An immediate tariff increase may not be feasible in the current setting, Prashant Singhal, emerging markets Technology, Media & Entertainment and Telecommunications (TMT) Leader at EY said two rounds of tariff hikes can be expected in the next 12-18 months, including one in the next six months.
“Tariff hike is necessary. Telecom as spend for consumers is fairly low, and tariff hikes should likely happen over next 6 months, I am not saying it must, but sooner the better…
“There has been one revision of tariffs in December, and if one or two rounds of upward revision happen to make it at least at par with other emerging markets, in a way that consumers don’t feel the pinch, that is where the revival of the sector will happen,” Singhal said.