Periodic Tariff Adjustments Must To Sustain Investment: Kumar Mangalam Birla

Debt-ridden telecom firm Vodafone Idea sees the need for a tariff hike to sustain investments in the network, even as the company continues to discuss with lenders to fund its ₹45,000 crore capex plan, its Chairman Kumar Mangalam Birla said on Wednesday.

In a letter to shareholders, Birla said broadband subscriptions crossed the one billion mark in March 2026, driven by mobile connectivity, which has become the country’s primary gateway to the digital economy.

"Yet India's Average Revenue Per User (ARPU) remains among the lowest in the world. Periodic tariff adjustments are therefore essential if operators are to sustain investment and finance the rollout of next-generation networks," Birla said.

Vodafone Idea (Vi) posted ARPU, a key matrix of telecom operators' growth, at ₹190 in the March 2026 quarter.

After years of continuous losses, Vi recorded an increase in customers during the March quarter.

The company ended FY26 with 192.8 million subscribers, including 128.9 million on 4G and 5G networks.

Birla said that last fiscal year was a period for resolution for Vi and the current fiscal year is for action, following greater financial clarity, improved operations and renewed capacity to invest.

"FY26 was a year of resolution. FY27 begins a period of execution. The company enters this phase with greater financial clarity, improving operating performance and renewed capacity to invest," Birla said.

He said the priorities ahead are clear -- to execute the network investment programme, strengthen market competitiveness and translate a stronger balance sheet into sustained growth in customers and earnings.

Birla said the Indian telecom industry’s consolidation into three private operators and one state-owned player has restored pricing discipline and improved the sector’s investment outlook.

"Government policy has also played a decisive role in reviving the industry, enabling the expansion of digital public services, online education, healthcare, financial inclusion and e-governance. Telecom is no longer merely a commercial sector. It has become essential national infrastructure, underpinning India’s ambition to become a developed economy by 2047," he said.

Birla said India's ambition will depend on resilient, high-quality and reliable communications networks.

"Maintaining a financially viable and competitive telecom industry, supported by sustained investment from both private operators and the public sector, will be central to India’s next phase of digital transformation," he said.

Birla said Vi discussions continue with lenders to secure long-term funding for the planned capital investment programme of ₹45,000 crore over FY27 to FY29, supporting the expansion of a fully competitive network.