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. 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. Sunil 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 Average Revenue Per User (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," an Airtel statement said.
As a first step towards this, the company said it is taking the lead in "rebalancing" tariffs during November. In tariffed voice plans, the new rate is Rs 99, against the current Rs 79 - which works out to an increase of 25.3 per cent. This comes with 28 days validity and benefits like 50 per cent more talk time worth Rs 99, 200MB data, 1p/sec voice tariff.
The other categories where a hike has been announced are unlimited voice bundles and data top-ups. This is the first time after a long gap that the company has hiked tariffs at this scale.
Previously, the revision had been to a limited extent. For instance, in July this year, Airtel discontinued its Rs 49 prepaid recharge, raising entry-level pricing to improve realisations, and also upgraded its postpaid plans. The hikes are far-reaching, this time around.
In the unlimited voice bundle, Airtel's plan priced at Rs 149 will now be Rs 179 with a validity of 28 days and benefits such as unlimited calling, 100 SMS/day, 2 GB data; even as at the top end the Rs 2,498 plan has been hiked to Rs 2,999 and comes with 365 days for unlimited calling, 100 SMS/day and 2 GB/day data.
For data top-ups, the Rs 48 plan would now cost Rs 58, offering 3 GB data; while the Rs 98 plan has been increased to Rs 118 with 12 GB data. Airtel has also announced a tariff hike in Rs 251 data top-up plan, which will now cost Rs 301 with 50 GB data.
It is pertinent to mention here 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.
Vodafone Idea CEO Ravinder Takkar, during a recent post-earnings investor call of the company, had asserted that tariff hike remains critical for continued revival of the sector. Takkar said the company has started working on raising mobile tariffs, and it is expected to be in place very soon. "Some activity on tariff hikes has started to happen. Tariff hikes which are the next important step will also take (place) soon. For us, particularly as a company, we will not shy away from raising tariffs," Takkar had said.
The telecom sector is buoyant and upbeat after the government recently approved a blockbuster revival package that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.
The measures -- aimed at providing relief to telecom service providers that have to pay thousands of crores in unprovisioned past statutory dues -- also include the scrapping of Spectrum Usage Charge (SUC) for airwaves acquired in future spectrum auctions.