Following Airtel, Vodafone is now set to raise tariffs for its entry-level prepaid plans by around 61%.
Instead of the earlier rate of Rs 49 for its 28-day validity pack, the rate is now hiked to Rs 79.
The reduction in the validity period of its plans will help the telco improve its realisations.
Prepaid Pack Validity Reduced
On prepaid packs costing below Rs 79, validity is reduced to 14 or 21 days.
So, if one purchases the Rs 49-prepaid pack, they will get only 14 days’ validity.
The Rs 65 plan has a validity of 21 days.
Rs 149 Minimum In Order To Avail Unlimited SMS
The telco will also stop offering outgoing SMS facility on any combo/validity packs of Rs 100 or less.
If one wants to avail the facility, they will have to get an ‘unlimited calls’ pack.
The minimum amount for such packs is Rs 149 with a 28 day validity.
Poor Subscriber Figures
Presently, over half of the telco’s total subscribers are still on 2G which yields low-priced recharges.
As of April, the company has 122.53 million broadband users out of its total wireless subscribers of 281.90 million.
In comparison, Airtel has 190.99 million broadband users out of a base of 352.91 million.
Jio currently rules the roost with 427.67 million wireless broadband subscribers.
Hope To Turn Things Around
Vodafone had also tried to restructure enterprise postpaid tariffs with hopes of improving realisation per customer.
Analysts are of the view that it needs to ramp up its efforts to increase revenues if it wants to keep its head above the water and survive.
One of the ways it can do so is by increasing headline tariffs.
Tariff Revisions May Not Be Enough
However, the company’s own management does not feel confident about that strategy yielding any significant result if structural issues are not sorted out.
CEO Ravinder Takkar said that the tariff revisions are a step in the right direction and will also help improve average revenue per user (ARPU).
But despite that, the changes are not “material enough to solve the structural issues that the industry is facing.”
He said that his company is communicating with the Telecom Regulatory Authority of India (TRAI) on floor pricing despite the regulator opposing setting up a floor pricing mechanism.
TRAI says that the move would be against consumer interests.