The three major private telecom players in India — Vodafone Idea, Bharti Airtel and Reliance Jio — all hiked their prepaid tariffs, which came into effect last week. However, now both Airtel and Vodafone Idea have announced that they are removing their FUP limits (Fair Usage Policy) on their unlimited plans, which makes calls within and outside the network free.
A FUP is usually put in place by a service provider because a small number of users may use an excessive amount of the service. The FUP limit is usually placed higher than the usage of the average user, and such that users don’t reach the limit. When an FUP is imposed, it seeks to address this imbalance, and beyond the ceiling, the speed is reduced (in case of data) or a charge is levied (in case of calls).
All three companies had announced limited as well as unlimited plans, and their unlimited plans offered free calling within the network but had a FUP (Fair Usage Policy) limit on calls to other networks. Earlier, beyond the ceiling, calls would be charged per minute.
Up until the tariff hike, Jio offered free calling to all, but with the tariff hike, placed an upper limit on calls to other networks.
When Airtel and Vodafone Idea announced their hiked tariffs, both said that calls beyond the FUP would be charged at 6p/min. Now, they have both made announcements that this cap no longer applies.
“We heard you! And we are making the change. From tomorrow, enjoy unlimited calling to any network in India with all our unlimited plans. No conditions apply,” Airtel tweeted.
“We're always changing to give you the best. That's why we're giving you truly unlimited calls to any network in the country,” Idea tweeted.
The price hikes came after first among a war between the telcos, which was then worsened by the Supreme Court’s verdict on the Adjusted Gross Revenue (AGR) dispute. The financially-strained telecom sector is sitting on a debt of more than Rs 7.5 lakh crore and was further stressed following the recent adverse Supreme Court verdict asking telecom companies to pay dues to the government — settling a dispute that lasted over a decade on the interpretation of Adjusted Gross Revenue (AGR).
As per the SC verdict, telecom operators have to shell out a whopping Rs 92,000 crore in total in past dues — a huge chunk of which is owed by Airtel and Vodafone Idea — at a time when they are grappling with tough competition, debt pressure and shrinking revenues.
After provisioning for AGR, Vodafone Idea posted a massive loss — the biggest loss in India’s corporate history — of Rs 50,921 crore in Q2 FY20. Airtel posted a net loss of Rs 23,045 crore.
Multiple telcos have filed review petitions with the court. This comes after the recent Cabinet decision cleared a two-year moratorium on spectrum payments but did not give any relief on the AGR front and the government announced in the Parliament that there is no consideration on its part to go for a waiver on any component of the Supreme Court's AGR order.