Airtel and Jio Chase the Same Goal of High ARPU With Differing Methods

Follow Us

Bharti Airtel

Until now, the story of Reliance Jio and Bharti Airtel has almost run a parallel course in the industry when it comes to the highly sought after metric of Average Revenue Per User (ARPU). Bharti Airtel, the Sunil Bharti Mittal led telecom operator, has been focusing on driving up its revenue via high-quality services and high paying subscribers. At the same time, Reliance Jio has equally diversified its subscriber base with massive additions and expanding the basket of goods being offered to these subscribers, from the ultra-cheap data packets to premium, extravagant gigabit connections. However, with the latest quarter reports from Reliance Jio, the industry experts doubt if the paths of the two biggest telecom companies in India are diverged from one another. But, as per our estimates, the current methods of Reliance Jio and Bharti Airtel seems to be simply a means to an end.

Bharti Airtel’s Focus on High Paying Consumers

Bharti Airtel, instead of introducing cheaper plans for its subscriber, has sought to take the opposite stance of increasing the prices using postpaid plans. It’s quite well known that postpaid subscribers bring in a big chunk of the revenue, and they are a better deal for the customers. Leveraging this phenomenon, Bharti Airtel has bundled all its high-ARPU services like DTH connection, broadband and postpaid plan coupled with premium services into a single banner of Airtel Black. The telecom operator has made no recent attempt to revamp its prepaid portfolio; on the contrary, it has introduced plans which are highly priced and bundle OTT benefits.

Reliance Jio’s Focus on Volume

Speaking of Reliance Jio, the telecom operator added a massive chunk of 14 million subscribers to its total pie. With the analysts estimating that the total subscriber count of Reliance Jio would reach 530 million by 2024. However, the thing to note is that these subscribers mainly come from a low-paying background courtesy of the heavy JioPhone subscriber addition and the launch of subsequent JioPhone plans. This also remains the reason why the profits and EBITDA of Reliance Jio soared higher than expectations, but the ARPU did not.

Consideration of Active Subscriber Base

In such a scenario, a point worth considering is also the active subscriber base situation. In this metric, which is the most important one after ARPU and subscriber base, Bharti Airtel stands ahead. This means although Bharti Airtel is devoid of fancy numbers when it comes to subscriber addition, whatever subscribers it has have a higher tendency of paying more. Now Bharti Airtel seems to be upping the ante for these subscribers by making them pay for better services. Metaphorically, it can be said that Bharti Airtel is building slow, but it’s laying a strong foundation for its telecom business.

Reliance Jio’s path towards higher ARPU, which is the common denominator for success and sustainability in this industry, invites a higher investment in operational costs. With the costs low in the previous quarter, Reliance Jio was able to post impressive figures. However, it remains to be seen how the telco bears the brunt of the market in the coming days. It’s no doubt that both telcos are chasing the same goal but with different methodologies. While Airtel is bullish on retaining its subscribers and loosening up their pockets, Reliance Jio is aspiring for more volume. It will be interesting to see what problems both the telcos face in an industry that is unpredictable, like Pandora’s box and which one of them comes out more resilient.

Reported By

Junior Editor

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

Recent Comments

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments