Airtel, Vi Will Lose Millions Of Users After Tariff Hike Upto 20% (Report)

Airtel, Vi Will Lose Millions Of Users After Tariff Hike Upto 20% (Report)
Airtel, Vi Will Lose Millions Of Users After Tariff Hike Upto 20% (Report)

Considering the highest hikes taken in their base 2G pack, Bharti Airtel and Vodafone could make telecom service less affordable further leading to some slippage of subscribers, according to the ICICI Securities.

 Subscribers To Decline

The analysts at ICICI Securities said, “…we expect subscribers to decline in the next few quarters due to reduced affordability in base 2G plans, and SIM consolidation due to general increase in tariffs,”.

Further adding that it further expects subscriber downgrade to lower GB per day plans.

In the past two days, the two telecom service providers have announced hikes of 20-25% across prepaid plans. 

It seems to the highest hikes in the base packs of Rs79 after revision comes to Rs99 for 28 days.

Earlier Hike In Tariff

It is noteworthy here that both the service providers have increased their base plans from Rs49 to Rs79 in Q2FY22.

With this new addition, the tariff for the base voice-only pack (used by 2G subs) has doubled to Rs99 from Rs49 in the past two quarters.

Coming to the data plan tariffs (for 4G users), it has been increased by ~20%. 

For instance, the most popular plan (offering 1.5GB/day for 84 days) has seen a 20.2% jump to Rs 719 from Rs 598.

Anticipated Change In Tariff Structure 

Analysts said, “We would have liked it more if the players had taken a steeper hike in 4G data plans while maintaining the affordability of 2G mobile services. We were anticipating a change in tariff structure (despite assigning it a very low probability!) with moving away from unlimited data in the base plan, which would have paved the way for premiumization,”.

ICICI Securities suggest Jio follow suit and would increase the tariffs by the same quantum. 

This way they could keep its ‘20% more’ value proposition intact.

Bharti Airtel plans to push more postpaid subs with the help of narrowing of postpaid tariffs compared with prepaid and increasing content offerings with family plans. 

So far, prepaid constitutes ~80% of mobility revenues for both telcos and new tariffs will result in a 21% prepaid ARPU rise. 

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