Friday saw the launch of the new Bharti Airtel postpaid series of plans known as Airtel Black. The name sounds as premium as the service and we can’t disagree because of the promises that the telecom operator is making for these plans. The telco has said that it will bundle all other services in the same plan, such as Digital TV, and Airtel Xtream Broadband plan under a single bill which the consumers will be able to pay and see in the Airtel Thanks app. This will bring, not only a lot of ease for the consumers but also many benefits since Airtel will keep these customers at priority when it comes to grievance redressal.
The Revival of Postpaid
We should also not lose sight of another premium postpaid offering by a competing telco which is named after a colour. What we are talking about here is Vodafone RED. While Airtel Black is about including all other services under a single bill, the Vodafone RED plan does something different by offering premium services to postpaid customers. What seems to be happening in the industry right now is a revived interest in postpaid offerings.
It is worth noting that in the previous years, as much as 40% of the revenue of the telecom operators has come from postpaid plans, with only 5% of the numbers belonging to the postpaid connections. Hence, there is no doubt that when it comes to revenue, postpaid plans are a much better bet as compared to prepaid connections. It's just that companies in India find it hard to market these plans.
It goes without saying that postpaid is a sure-shot earner for the telecom companies given its high ARPU delivery for the company and if there is any industry metric that the companies are chasing relentlessly it is that only. Many companies have seen their ARPU dip courtesy of the IUC charges which have been wiped away from the industry. The 0.06 Rs charge which was paid among operators was something that was done away with, this has surely eaten away a chunk of the revenue. The premium postpaid plans seem to be a remedy.
The Effect on ARPU Because of Postpaid
While Bharti Airtel and Reliance Jio have the luxury to offer bundled plans with many other services included in it. Other telecom operators like Vodafone Idea can’t seem to do so because of the relative absence of You Broadband in many circles and cities.
Reliance Jio seems to be totally missing out on the premium bundled postpaid plans and rightly so because the telecom operator has less to worry about its finances. Courtesy of the high response towards its postpaid plans, constantly rising broadband connections, the telco is better disposed to handle the financial brunt of the industry.
Perhaps, what the other competing telecom operators can do is bundle family plans in a single postpaid connection, something which has been done before along with some premium services like OTT subscriptions to find high-paying consumers. This is likely to add more to the financial pie of the telecom operators and will help the companies in rising towards the Rs 220 ARPU, famously predicted by ICRA.
