Prepaid plans in India are set to become costlier.
ARPU And Why It Matters
Indian telcos are looking to improve their average revenue per user (ARPU) and, to that effect, will be raising tariffs.
Users can expect a hike of up to 30% in the coming 6 months as Bharti Airtel and Vi will make tariff offers dearer.
ARPU is an important metric which influences an operator’s marginal profits.
A Good Time To Initiate Hikes
It is also a good time to raise tariffs since the economy is showing signs of recovery along with a receding impact of the second wave of the pandemic.
Customers should not be too troubled either since Indian tariffs are well below global benchmarks.
While Airtel and Jio are in a position to improve profit margins, for the struggling Vodafone Idea (Vi) and Bharat Sanchar Nigam Limited (BSNL), it’s a matter of survival.
Revisions In Airtel Plans
Airtel removed its entry level Rs 49 prepaid plan and has revised it to Rs 79- a 60% hike.
The plan has an added benefit of “four times more outgoing minutes of usage to customers along with double data.”
With these revisions, the firm’s revenue could go up by 3% and operating income by 10%.
Revisions In Vi Plans
Vi will also raise the prices of its plans in order to push entry-level users to pay for the same as they try to stay afloat in the business.
It faces over Rs 22,000 crore in dues from December 2021 to April 2022.
It has reduced plan validity for its Rs 49 plan from 28 days to 14 days in Maharashtra and Gujarat.
For a 28 day plan, customers in these states will have to shell out Rs 79.
These changes will soon launch nationwide.
It has also reduced data benefits under its ‘Business Plus’ postpaid plans for its corporate customers.
Jio Snubs ARPU In Favor Of Increasing User Base
Vi has been stressing the need to raise tariffs and ARPU to improve the health of the sector.
However, they have been hesitant to initiate the price hike since market leader Reliance Jio has been rushing to increase its user base with its aggressively priced plans even at the cost of ARPU growth.