Will consumers cut back their spending on FMCG goods to pay higher telecom bills?

Mumbai: One man’s meat is another’s poison. Will this play out between Indian telecom companies and consumer firms, as the former is set to generate more revenues owing to the tariff hikes implemented last week? As a result of the tariff hikes, annual revenue of the telecom industry is expected to rise by about ₹50,000 crore. A moot question is what kind of dent this will make on the FMCG industry.

At least some industry executives and analysts think there will be an impact. “Higher telecom tariffs will hurt consumption demand to some extent for the next one-two quarters. Over the long run, consumers are likely to adjust to this change,” says Vivek Gambhir, managing director and chief executive officer of Godrej Consumer Products Ltd.