Thugs of Telecom – Airtel, Vodafone-Idea Will Sacrifice 25 Crore Users To Increase Profits

The new 'masterstroke' by Airtel, Vodafone is to squeeze the user, and extract more ARPU.

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25 crore Airtel, Vodafone users forced with monthly recharges
25 crore Airtel, Vodafone users forced with monthly recharges

Profits are the purpose of a business. We agree.

But what if the business’s sole purpose becomes profit? Then the needs of their customers are sacrificed, and thus, the customers are sacrificed.

In a cunning business move, Airtel, along with Vodafone-Idea has decided to sacrifice their 20 crore or 200 million users, and the objective is to increase profits.

Find out their latest ‘masterstroke’ to book more profits, at the expense of their users.

Ironical indeed!

Dual SIM Owners Targeted By Airtel, Vodafone-Idea

To first understand this whole business of sacrificing customers, let’s first understand how a typical telecom user in India is using his/her mobile right now.

After Jio introduced cheaper plans, millions of existing users took another SIM, and due to the easy availability of dual-SIM mobiles, this happened smoothly.

In most the cases, existing Airtel or Vodafone or Idea user took a new Jio number, and continued to use both the SIMs – primary one for data and calls, and secondary one as backup and/or because it was an old mobile number, they didn’t want to change that.

Now, as per latest numbers, such dual SIM users, who are using Airtel as a secondary number are 100 million and for Vodafone, it is 150 million.

These users typically spend Rs 10 per month just to keep their SIM active, and even if outgoing calls don’t happen, atleast they can get incoming calls.

As we reported since last few days, such minimum value plan to keep the number alive has been removed, and the customers are forced to recharge for a month to ensure incoming and outgoing calls.

And this is where the ‘masterstroke’ arises.

Airtel, Vodafone Will Sacrifice 200 Million Users

Airtel’s 100 million, and Vodafone-Idea’s 150 million becomes total of 250 million or 25 crore users. These are low-paying customers, with low ARPU of just Rs 10 per month or Rs 120 per year.

Now, both Airtel and Vodafone have launched their minimum plan of Rs 35, which ‘has’ to be recharged, for keeping the number alive, and to get incoming calls.

Hence, the plan is to force these 250 million users to spend atleast Rs 35 per month.

This way, Airtel can ensure total revenues of Rs 2100 crore from these low-paying customers, per year, and Vodafone-Idea can ensure revenues of Rs 3144 crore per year.

That’s almost a jump of 60-75% in revenues.

What If Customers Refuse To Recharge?

Sacrifice. Airtel and Vodafone, both have understood that there is no loss in this strategy. There can be three options now:

  • The low paying customer will have to recharge the minimum pack, which is Rs 35 right now. Profit for the telcos.
  • The low paying customer will move to the unlimited pack, thus pay atleast Rs 150 per month. More profit for the telcos.
  • The user will ditch Airtel and Vodafone. This would be a loss of just Rs 10 per month revenue, which can be balanced by the increased profits.

Bharti Airtel CEO and managing director (India & South Asia) Gopal Vittal said, “You could expect some shrinkage of our low-end customer base as we move to minimum Arpu plans, but dramatic growth of pre-paid on 4G and of course the post-paid segment. If you look forward a couple of years, we should see at the lower end 100 million customers giving us low-double digit Arpus compressed further by 30% to 40% and an Arpu upside there. And on the middle end almost all customers will start sort of moving to 4G.”

What Does This Mean?

This means that the telecom firms are now becoming aggressive, and more focussed towards ensuring profits. This means that the poor telecom user, who cannot afford a minimum recharge per month will be without a SIM.

This means that the business of telecom has now become even more complex.

All eyes set on Jio now, as a new cheaper plan with longer validity can turn the tables.

Do share your views, opinions by commenting right here.

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"Thugs of Telecom - Airtel, Vodafone-Idea Will Sacrifice 25 Crore Users To Increase Profits", 3 out of 5 based on 12 ratings.
  1. Raj says

    Switching to mtnl trump

  2. Venkat says

    Sheer idiocy on your part dear writer and trak.in you seem to be a mouth piece of Jio. If a customer is not willing to pay for services, then he doesn’t deserve to be a customer. Losing that consumer to improve health of business so that actual customer who is willing to pay for the services is comman sense- not a cunning move at least when the cost of providing that service is lakhs of crores. Do you ever mind Jio extracting more ARPU than VODA/IDEA or Airtel through practices which can actually be called cunning ? Stop the nonsense and write some sense.

    1. ashu says

      This is a bad bad move by airtel, i too received a message today. i even had a balance of 420 rs in my account ,but they want me to recharge it every month like wtf!!.?
      I will obviously switch from airtel .

    2. Sunali says

      You are idioit from airtel vodafone and idea.
      They were looting us by taking our 300rs and giving just 1gb with poor data speed.
      They are getting profit and they are hunger to get more and more.
      They should give even cheap tariff than jio rather than extorting money.
      If they can’t face competition then they should close their service no one force them.

  3. NetGuy says

    And how much money have Airtel and Vodea spent, to construct their network? 10s of THOUSANDS of CRORES?? If *YOU* had spent that much money, what would YOU do??!!! Please don’t write such nonsense!

    1. deepak says

      Do you think that they have not recovered these amount earlier and they were in all time loss……… Earlier also they were in profit and now due to Gio their profit ratio is decreased and hence this nonsense move…. As they committed for lifetime validity to attract customer, then its their duty to provide lifetime service on these numbers…..

    2. Arun C says

      If you remember, we are entitled to go to Consumer Court, I have signed and have a copy of the sim registration copy, mentions “life-time validity” Every prepaid consumer has this. Minimum of 22 years validity, which they must and should honor.

  4. Balaji R says

    why cant we move to BSNL? if I did, Can I get Incoming calls for free?

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