Telcos Bharti Airtel and Vodafone Idea Limited recently made a big move by removing talk time plans for prepaid users across the country. This essentially means that subscribers won't be able to recharge with basic talk time recharges such as Rs 20, Rs 30, Rs 50 and various other denominations. While Airtel and Idea Cellular retained the Rs 10 talk time plan, Vodafone even removed that as we were not able to find the plan of same denomination on the company's website. The talk time plans offered by telcos right now are Rs 10 (Airtel and Idea Cellular), Rs 1,000 and Rs 5,000. All the three plans come with unlimited validity.
What are Talk Time Plans?
For the unaware, talk time plans avail a user certain amount of Balance in their account which they can use for voice calls or data or sending SMS, but they'll be charged at standard rates. Furthermore, users can make use of these talk time balance to activate some other plans via Balance Deduction Mode. Talk Time plans exist for a long time, but finally, telcos are killing them in a bid to boost the ARPU.
While private telcos phased out the talk time plans, state-run telcos- BSNL and MTNL are still providing them to the subscribers.
What Made Telcos Done Away With Talk Time Recharges?
Well, after the entry of Reliance Jio to the Indian market, the Average Revenue Per User (ARPU) of telcos declined by a huge margin. That said, the ARPU of Jio is slightly ahead of other telcos such as Airtel and Vodafone Idea because it's providing combo recharge plans only. You might be wondering by now- doesn't Jio offer talk time recharges? Well yes, the telco is giving talk time recharges, but you can't make voice calls or consume data with that talk time balance.
In order to enjoy services from Jio, you've to be on a combo recharge plan which starts at a price as low as Rs 19. But only a limited set of users recharge with the weekly plans of Jio. The best combo recharges on Jio network start at Rs 149 and goes all the way up to Rs 9,999 which is a yearly plan. Jio often termed that the Rs 399 recharge is the best tariff plan on its network, so most of Jio customers are recharging this plan.
The combo recharges are keeping the ARPU of Jio better than that of other telcos, and on the other hand, Airtel and Vodafone Idea are providing talk time recharges to retain the subscriber base. So to increase the ARPU, telcos made this move. Airtel recently stated that it wants to focus on premium customers by providing combo recharge plans.
Is it a Good Move from the Telcos?
While this move from telecom operators will undoubtedly increase their ARPU slightly- especially that of Vodafone Idea as the telco has over 400 million subscribers under its belt, it isn't going well with the subscribers. If we look at Airtel and Vodafone Idea' subscriber base, there are a lot of users who are still using feature phones and a combo plan with data benefit is useless for them.
To make the removal of talk time recharges a good move, telcos should bring an affordable open market plan offering unlimited calls, data and SMS benefits under Rs 100 like Jio's Rs 98 prepaid recharge, so that customers can choose it in the place of some full talk time recharges such as Rs 110 or Rs 120.
What's your view on this? Have incumbent telcos made a mistake by removing the talk time recharges? Let us know by commenting below.