One of India’s big three operators, Bharti Airtel, has announced plans to raise tariffs for all its prepaid plans by 20-25 percent. It has been calculated that this will enable the company to move towards the higher average revenue per user (ARPU) that it says it needs.
If everything goes according to plan, ARPU is expected to rise to 200 rupees (about $2.69), and eventually 300 rupees ($4.03). The new tariffs will come into effect from November 26, 2021.
Indian press reports say this is the first time in many years that Airtel has raised tariffs for most of the prepaid packs, though it has already revised tariffs for some of them.
Airtel has said that the tariff revision will "provide a reasonable return on capital that allows for a financially healthy business model". Equally importantly perhaps, the company feels that the increased ARPU will help to permit the substantial investments it requires in networks and spectrum – and of course the rollout of 5G.
As an example the base 79 rupees ($1.06) plan will go up to 99 rupees ($1.33). Unlimited voice bundle plans will also go up 20 rupees ($0.27) to Rs 501 ($6.73). Even the high-end 365-day Airtel 2,498 rupee ($33.58) plan has been revised to 2,999 rupees ($40.31) and data top-up plans have been adjusted.
The bottom line, according to Airtel, is that current ARPU is not sustainable. The question now is whether the company’s big rivals will feel the same way and, of course, how Airtel’s subscriber base – up in Q2 2021 by 2.24 million users to reach 323.47 million – will respond.
