Bharti Airtel and Vi to Go for Another Prepaid Tariff Hike in 2022

Airtel has time and again expressed that its short-term average revenue per user (ARPU) aim is Rs 200 while the long-term aim is around Rs 300. Vittal said that without reaching the Rs 300 ARPU level, a company such as Bharti Airtel wouldn’t be able to get a 15% RoCE (Return on Capital Employed).

Highlights

  • The last prepaid tariff hikes came during last leg of 2021.
  • Note that it isn’t just Airtel, but Vodafone Idea (Vi) as well which is talking about prepaid tariff hikes.
  • Airtel has time and again expressed that its short-term average revenue per user (ARPU) aim is Rs 200 while the long-term aim is around Rs 300.

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Bharti Airtel

The last prepaid tariff hikes came during the last leg of 2021. It hasn’t been long since that, and the industry companies are already talking about another round of tariff hikes. Bharti Airtel, CEO, Gopal Vittal, during the recent earnings call, said another prepaid tariff hike would likely come in 2022. However, it won’t be in the next three to four months, clarified Vittal.

Note that it isn’t just Airtel, but Vodafone Idea (Vi) as well, which is talking about prepaid tariff hikes. Ravinder Takkar, CEO, Vodafone Idea had said that the company is not going to wait for another two years before introducing a hike in tariffs. Takkar had said that Vi would go for a tariff hike in 2022 only.

But the telcos will be a little worried about the SIM consolidation right now. Thus, they will only go for another tariff hike after the SIM consolidation level goes down.

Vittal Says ARPU Level of Rs 300 Required

Airtel has time and again expressed that its short-term average revenue per user (ARPU) aim is Rs 200 while the long-term aim is around Rs 300. Vittal said that without reaching the Rs 300 ARPU level, a company such as Bharti Airtel wouldn’t be able to get a 15% RoCE (Return on Capital Employed).

The telco’s ARPU had already grown by almost Rs 10 QoQ to Rs 163 by the short impact of the tariff hike. The full impact of the tariff hike is likely going to be visible during the last quarter of FY22.

This is what even Vodafone Idea (Vi) needs at the moment. Analysts have said that without a prepaid tariff hike, it would be hard for Vodafone Idea to sustain for a long period of time. The mobile tariffs in India are still very low for the operators to make a decent return, and thus it won’t be surprising if all of them go ahead with a prepaid tariff hike in 2022.

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