Bharti Airtel’s average revenue per user (ARPU) is expected to drive up in the near term. The analysts have said that much of the telco’s 2G user base will also be retained and converted into 4G because of the recent smartphone offer. This will help the telco reduce the churn rate. At the same time, with converting from 2G to 4G, customers will naturally start paying more which will mean an increase in the ARPU for Bharti Airtel without doing much.
For the unaware, Bharti Airtel is offering a Rs 6,000 cashback offer to the users. This cashback will be given to the users in two parts - a) Rs 2,000 after 18 months and b) Rs 6,000 after 36 months. To be eligible to receive the cashback, the customers have to continuously recharge with the Rs 249 plan at least.
Analysts Call Timing of the Smartphone Offer from Bharti Airtel a Positive Move
CLSA, in a report, said that the timing of the smartphone offer from Bharti Airtel is positive, keeping in sight the upcoming launch of the JioPhone Next in India. There are over 300 million 2G customers in India. Reliance Jio is looking to get the maximum of them through its JioPhone and the JioPhone Next offer.
It is worth noting that according to some analysts, the ARPU gain for Bharti Airtel will only reflect if the telco is able to see any sizeable gain in the number of customers opting for the cashback scheme. The cashback scheme requires users to at least keep subscribing with the Rs 249 plan, which is not a bad amount for the company if it can get millions of more users to keep paying it over the long term.
According to an ET Telecom report, an analyst at a leading brokerage firm said that Bharti Airtel needs at least 4 to 5 million 2G customers to opt for the cashback offer before it can see any meaningful ARPU growth.