Somewhere between July and October, Bharti Airtel shall spearhead a substantial 15-17% increase in tariff hike as per Indian telecom analysts.
Airtel Eyes ARPU Boost to Rs 286 by FY27
Previously in December 2021, a hike of 20% was given. As against the current average revenue per user (ARPU) of Rupees 208, the hike, when implemented shall increase the ARPU to Rs 286 by FY27. With the anticipated telco’s subscriber base growth at 2% annually, the analysts at Antique Stock Broking expect the subscribers base grow more than 1% industry growth.
Considering India’s position as one of the world’s most affordable telecom markets, Airtel is advocating to raise the current ARPU from Rs 200 to Rs 300.
The first tariff revision after Jio’s 2016 launch was in 2019. This was later followed by another hike in the month of December 2021, which boosted the ARPU by Rs 30 and Rs 36 over four quarters for Airtel.
Various factors cited to contribute to the ARPU increase are tariff adjustments, customer upgrades to 4G, and transitions to postpaid plans.
Telecom Market Dynamics
With the market consolidation is expected to continue, it is projected that the Airtel and Jio combined reach an 85% market share in the medium term.
Due to various financial and execution challenges plaguing Vodafone Idea and BSNL, their market share is plummeting. VI’s market share dropped from 37.2% in September 2018 to 19.3% in December 2023.
On the flipside, during the same period Airtel went from 29.4% to 33.0%, whereas Jio went from 21.6% to 39.7%.
Despite the challenges in the telco sector, there is still place to grow in the market, provided as many as 25% of total network subscribers still using 2G networks.
What can drive the ARPU growth and market expansion are the efforts of 4G upgrade in addition to tariff adjustments as well as strategic pricing.
