Vodafone Idea May Also Remove Low-Value Postpaid Plans Following on Footsteps of Airtel

In the first week of May, we saw Bharti Airtel do away with postpaid plans which were priced below Rs 499. Not only that, but the telecom operator also removed some of the other postpaid plans from its portfolio as well which included plans like Rs 649, Rs 1,199 and more. Now in a similar move, the telecom market leader, Vodafone Idea could also discard similar low-value postpaid plans to boost average revenue per use (ARPU), reported ET Telecom. This would obviously come at the cost of subscribers who are likely to resort to rival telcos. Balesh Sharma, Vodafone Idea CEO has spoken of this move to analysts in an earnings call on Tuesday.

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Vodafone Idea Reduces Expenses and Helped by Tax Returns

Bharti Airtel has removed the Rs 299 and Rs 399 postpaid plans from its portfolio, which were some of the most liked plans. It is worth noting that the telco has a total of 5-7% postpaid subscribers in its total subscriber base of 284 million, but this small portion of subscribers contributes approximately 20-25% of revenue to the entire share of Bharti Airtel’s revenue. Talking about this prospective move, Balesh Sharma said, “We too have a Rs 299 plan and may decide to move in and start with a few markets first.”

Vodafone Idea also revealed that helped by a tax refund and reduced expenses, its losses had come down to Rs 4,878.3 crore in the fourth quarter and the revenue growth remained flat and 53.2 million users switched to rival operators.

Vodafone Plc also reported an annual loss of Rs 7.6 billion on Tuesday with Rs 3.6 billion spent on Vodafone India’s merger with Idea Cellular along with other impairments. Analysts also highlighted that Vodafone Idea’s service revenue rose 0.1 % on-quarter to Rs 11,775 crore in January-March but still it was lagging in comparison to the other rival telcos, Reliance Jio and Bharti Airtel. According to Credit Suisse, the sequential 4.3% and 7% growth in the telecom revenue was upped by Airtel and Reliance Jio, while the telecom market leader continued to lose market share.