The move of introducing minimum recharges from the private telecom operators like Vodafone Idea and Bharti Airtel has turned out to be surprisingly well for these carriers. ET Telecom reported that as per a new True Balance survey findings, the introduction of the new prepaid recharges hasn’t affected the subscriber base of these telecom operators. Instead, it is on the path of increasing the revenue for the incumbents. In the previous months, these private telcos namely Airtel and Vodafone Idea replaced the top-up plans with smart plans of Rs 35, Rs 65 and Rs 95. Analysts and experts had predicted that due to this move the industry might lose up to 60 million subscribers in the next six months, however, there has been no such mass weeding out of subscribers.
No Erosion of Subscriber Base for Incumbents
The introduction of these new minimum prepaid recharge plans has set a minimum threshold for Average Revenue Per User (ARPU). The move was a well-thought step by the telcos to weed out subscribers who were not generating any revenue for the company, but owing to these new recharges which will be required to be done by the subscribers to keep their services running, telcos will be able to notice a peak in their ARPU which is a crucial industry parameter.
Going by the words of True Balance, these smart recharge offer additional benefits such as more talk time and data in comparison to the top up plans. Also, the top up plans did not use to come with an expiry date, but the smart plans do have an expiration, as such the subscribers have to recharge every month.
User Ratios Witness Noteworthy Increase
The findings also revealed that owing to the Rs 35 smart tariff plan instead of the usual Rs 20 and Rs 30 top-up plan, the user ratio saw a jump from 12% to 20%. Similarly, the smart recharge plans of Rs 65 and Rs 95 witnessed the rise in user ratio from 24% to 25%.
True Balance Founder & CEO, Charlie Lee in his statement said, “Data consumption is on a steady rise in the urban as well as the rural areas. Industry reports state that an average Indian smartphone user spends 4X time on online activities. Telecom operators are trying to offer their subscribers the best value with these data packs. These new tariff plans have definitely helped these operators to retain their subscribers.”
It is worth noting that although the data tariff war eroded the revenue of the telecom industry, it has not failed to make India one of the top most affordable data providers besides increasing internet penetration by a massive rate. The minimum recharge plans by the incumbent telcos – Airtel and Vodafone Idea were a move against the competitively priced plans of Reliance Jio, and it was also a move to increase their average revenue per user (ARPU).
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.