Airtel Consumers Accepted Prepaid Tariff Hike of 2021 Pretty Well

The Airtel consumers have not really rejected the higher tariffs. Loyal customers stuck to the services of the telco even when the tariffs moved up. The overall revenue from mobile services for Airtel in India was up 20.8% YoY during Q3 FY23. Talking about the 4G mobile data customers that Airtel has, the numbers went up by 21.2 million YoY to 216.7 million in Q3 FY23.

Highlights

  • On February 7, 2023, Bharti Airtel Limited announced its financial results for the quarter ending December 2022.
  • The special thing about this quarter (Dec 2022) is that it marks the completion of one year from when Airtel and other telecom players implemented prepaid tariff hikes for mobile services.
  • The tariff hikes did result in wireless subscriber loss for the sector in the short term.

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On February 7, 2023, Bharti Airtel Limited announced its financial results for the quarter ending December 2022. The special thing about this quarter (Dec 2022) is that it marks the completion of one year from when Airtel and other telecom players implemented prepaid tariff hikes for mobile services. The tariff hikes did result in wireless subscriber loss for the sector in the short term. However, one thing that stood out was the fact that when all the telecom players were losing wireless subscribers, Airtel was adding them. Be it the month of Jan or Feb 2022, when Jio and Vodafone Idea (Vi) lost wireless subscribers, Airtel added them.




It suggests that when it comes to paying a premium for mobile services, consumers turn towards Airtel. This is partly because of better branding from Airtel, and also, when it comes to paying more for services, consumers would want to turn towards the brand that is giving the best service. According to Opensignal data, Airtel has been ahead of its competitors in key experience areas for a long time.

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This is why, even though most of the tariffs of Airtel and Vodafone Idea (Vi) match, the average revenue per user (ARPU) per month figure and overall revenue figure are way different for both operators. Airtel's ARPU is the highest among all the players in the industry. The telco's plans are slightly more expensive than Jio's plans, but that hasn't really disturbed its business in a major manner. The time for cutthroat competition for market share is gone. The telcos now want to improve profit margins by earning more from each customer.

The Airtel consumers have not really rejected the higher tariffs. Loyal customers stuck to the services of the telco even when the tariffs moved up. The overall revenue from mobile services for Airtel in India was up 20.8% YoY during Q3 FY23. Talking about the 4G mobile data customers that Airtel has, the numbers went up by 21.2 million YoY to 216.7 million in Q3 FY23. This means that prepaid mobile services consumers in India are choosing Airtel to get premium services.

Read More - Airtel 5G Plus Now Available in Dharamshala, Mandi and Baddi

Airtel's ARPU for the quarter was Rs 193, up by Rs 30 YoY. With another tariff hike, Airtel's ARPU should comfortably jump by Rs 30 to Rs 40 in a year's worth of time. The telco's medium-term goal is to reach an ARPU figure of Rs 300. It would be very achievable, especially as more consumers shift towards 5G and start consuming more data.

For now, Airtel has already started removing the Rs 99 plan as the base option for prepaid consumers from many circles. The telco has made Rs 155 plan as the new base option for users looking for affordable tariffs. This means that several million customers in the Rs 99 would soon have no other option but to recharge with the Rs 155 plan. That would further boost the ARPU figure of Airtel in the short term. Reliance Jio's ARPU, in comparison, is Rs 178.2, quite far from where Airtel's ARPU figure stands.

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