Airtel announces hike in tariff for prepaid services by 20-25 pc

Telecom operator Bharti Airtel on Monday announced 20-25 per cent tariff hikes for various prepaid offerings, including tariffed voice plans, unlimited voice bundles and data top-ups, and said the new rates will come into effect from November 26.

It is pertinent to mention that Bharti Airtel Chairman Sunil Mittal had earlier this year said the industry’s tariffs need to go up amid tremendous stress in the telecom sector.

The company has been of the view that mobile industry ARPUs (Average Revenue Per User) is not sustainable and should improve to

Rs 200 in the near term, and Rs 300 in the longer term. For the just-ended quarter, Airtel’s mobile ARPU increased to Rs 153. With Airtel announcing the tariff reset, many industry watchers expect Vodafone Idea and Jio to follow similar lines.

The entry-level tariffed voice plan has been raised by about 25 per cent, while for unlimited voice bundles, the increase in most cases is about 20 per cent. Mittal led telco - whose India mobile customer base stood at about 323 million at the last count - has also increased the tariffs for data top-up plans by about 20-21 per cent. In a statement announcing the revised mobile tariffs, Airtel said it has always maintained that the mobile ARPU needs to be at Rs 200 and ultimately at Rs 300 to provide a reasonable return on capital that allows for a financially healthy business model. “We also believe that this level of ARPU will enable the substantial investments required in networks and spectrum. Even more important, this will give Airtel the elbow room to roll out 5G in India,” a release said. As a first step towards this, the company said it is taking the lead in “rebalancing” tariffs during November.

This is the first time after a long gap the telco has hiked tariffs at this scale. The hikes are far-reaching, this time around.