If there is one telecom operator in the industry right now which has been handed the short end of the stick, it is Vodafone Idea. The company has been through a lot lately, and things do not seem to be stopping from progressively getting worse for the telco. Also, the fears of Vodafone Idea collapsing are becoming real for all the stakeholders in the company. In such a situation, it is likely that Vodafone Idea will get desperate for breath, and in a move on those lines, the telco has made a tariff hike in a somewhat proxied manner. Although the tariff hike is not really apparent for a lot of subscribers because of the way in which it has been done, but still it can be said that it will have some impact on the subscribers and maybe on the finances of the company as well.
What the Tariff Hike Actually Means
Firstly, we will have to explain the nature of the tariff hike that has been made by Vodafone Idea. The plans that have received the hike indirectly are the Vodafone Idea REDX postpaid plans, and if you do not know, the Vodafone Idea REDX Postpaid plans are a premium offering that requires the subscriber to spend north of Rs 1,000 every month on their bill. As such, making a tariff hike on an already premium postpaid plan has saved Vodafone Idea from the wrath of prepaid subscribers, which are comparatively low paying and many in number. Also, another thing to note is that the hike has not really been made in the postpaid plan directly, as in the actual price of the postpaid plan starts at Rs 1,099 only, but it is the add-on fee that has been very subtly changed.
Change in Add-On Fee
For instance, the add-on fee of Rs 149, which was the previous figure, has now been turned into Rs 249. This means that the Vodafone Idea REDX plan which used to allow subscribers to have up to 5 members in a plan under Rs 2,000 is no longer the case. The 5 members postpaid plan by Vodafone Idea costs Rs 2,299 at the least. Also, the removal of the Rs 799 postpaid plan makes it clear that Vodafone Idea does not want to hold on to low paying postpaid subscribers and is making an aim towards the high ARPU, which is an industry-wide chased after figure and really a signal for good finances.
Vodafone Idea Likely on Footsteps of Bharti Airtel
Vodafone Idea seems to be following in the footsteps of Bharti Airtel, although not entirely in a mapped out manner. We have already seen in the quarterly earnings report of Bharti Airtel how the introduction of the more premium Black postpaid plan has paid off well for the telco with a significant rise in ARPU. The hint that this strategy seems to be working in the market can be good news to Vodafone Idea. However, whether or not this small financial gain would be enough to save the telco is a whole other story. The number of postpaid subscribers for any telco in India remains very low, and the number is most likely not big enough to make a substantial contribution to the telco’s help.