Bharti Airtel has managed to achieve its short-term average revenue per user (ARPU) goal. Over the years, the telco maintained that its short-term ARPU goal is Rs 200, while in the medium term, it wants to reach Rs 300. A few months back, Bharti Airtel raised the base plan tariff from Rs 99 to Rs 155, and it has certainly added a boost to the telco's ARPU. For Q1 FY24, Airtel reported that its ARPU has touched Rs 200. This can also be attributed to the high percentage of its active subscriber base. Almost all of Airtel's subscribers are active users. The telco has been weeding out inactive users from its subscriber base.
Read More - Bharti Airtel Reports Q1 Net Profit of Rs 1,612 Crore, ARPU Grows to Rs 200
Addition of 4G Subscribers a Great Boost to Revenues and ARPU
During Q1 FY24, Airtel said that its 4G data customers went up by 24.5 million YoY and 5.6 million QoQ. Airtel's 4G subscribers now constitute 68% of its total subscriber base. This has certainly been a contributing factor to the rise of Airtel's ARPU in the short term without any major tariff hikes. Bharti Airtel has also been making subtle moves to improve ARPU through its prepaid customers.
One of the most popular data vouchers from Airtel worth Rs 29 used to offer 2 days of validity, but it was silently reduced to 1 day. Then again, Airtel's postpaid subscriber base also saw decent growth. Airtel added close to a million new postpaid connections during the quarter. In a statement, the telco said, "We strengthened our leadership position in Postpaid segment with highest ever net adds of 0.8 Mn in Q1’24 thereby reaching a customer base of 40.4 Mn (including IoT)."
Gopal Vittal, MD, Bharti Airtel, said, "Our focus on winning quality customers and driving premiumization has helped us add 5.6 Mn new 4G customers and the highest ever postpaid customers in any one quarter. We exit the quarter with an industry leading ARPU of Rs 200."
The growth of postpaid subscriber base is definitely going to bump up the ARPU. One other way Airtel is trying to improve ARPU is through the Airtel Black offering. The telco bundles several of its services under Airtel Black, including DTH (Direct-to-Home), postpaid mobile, and fiber broadband, and charges a lump-sum amount from the customers for these.
Read More - Airtel Emerges as Top Wireless Subscriber Gainer in West Bengal and Mumbai
When Will Airtel Reach Rs 300 ARPU?
Bharti Airtel has quite some time to reach the Rs 300 ARPU milestone. It would require at least two major tariff hikes and an increase in Airtel Black customers as well as postpaid subscribers. The next tariff hike for mobile services is expected to come around 2024, post the general elections. However, Airtel continues to dive into strategies that will help it maximise revenues from existing customers without a major increase in tariffs.
It is easy to assume that Airtel would take another two years to reach its ARPU goal of Rs 300. However, what will be key to the company's revenues and ARPU would be 5G offerings when monetised. That can be a potential boost to ARPU as well. Airtel is planning to bring an FWA (Fixed Wireless Access) device for customers that could see huge demand.
