To elevate the ARPU earnings in the micro and macro terms, Bharti Airtel has hoisted the floor prices of various prepaid and postpaid plans. Since the telco giant is facing AGR dues pressure and expansion projects default, the hike in floor price is bound to increase the average revenue per user (ARPU) of the telco. The information was revealed by India Ratings and Research Private Limited. Bharti Airtel has comfortably increased the floor prices because of no competition. The largest telecom operator of India, Reliance Jio and Bharti Airtel offers similar priced entry-level prepaid plans. While the entry-level feature phone pricing of Jio is Rs 75, Airtel has priced it at Rs 79.
Airtel Made Prepaid Plans 61% Costlier
Airtel jumped in the hiking tariffs and increased the prices of its base corporate postpaid plans. Not only this, but Airtel made its entry-level prepaid plan 61% costlier. The reasons behind the price hike were the massive AGR dues, elevate ARPU and arrange capital for spectrum acquisition. Airtel also dropped the Rs 749 family postpaid plan and urged users to opt for Rs 999 plan that packs more data and benefits. Even though Airtel has introduced a price hike, it still does not have to worry about intense competition from Reliance Jio because of a similar pricing structure.
Indian Telecom Industry is Moving Towards Higher ARPU Regime
Ind-Ra revealed its findings and stated that the indirect tariff hike decision by Airtel reveals that the telecom industry is moving towards a higher ARPU regime. The rating agency also stated the blend of increasing data tariffs, data usage per subscriber and increasing data subscribers over one year indicates that the ARPU of the overall telecom industry can grow without tariff hikes.
Even though Airtel leads the industry with the highest reported average monthly data usage in the June quarter, it needs to monitor its subscriber base over the next three to six months. Trai customers data revealed that Jio added active subscribers in May 2021 at the cost of Vodafone Idea and Bharti Airtel. Jio gained 2.8 active million users in May, whereas Airtel and Vodafone Idea lost 5.6 and 7 million subscribers respectively.
