- Airtel could hike the prices of prepaid plans soon.
- Airtel is looking to increase its ARPU to Rs 300.
- Other telcos could increase the tariffs alongside.
According to a report from Money Control, Airtel CEO Sunil Mittal has mentioned the need to increase the ARPU (Average Revenue Per User) to Rs 300.
“We all know that we need to have an ARPU (average revenue per user) of Rs 300 a month, which will still be by far the cheapest. India needs to have an appropriate pricing mechanism. I hope we will get to that point,” said Sunil Mittal to Money Control.
Average Revenue Per User is the metric used by telcos to measure the profitability, revenue, and growth of the company. Airtel has been leading the pack with the highest ARPU in India, at Rs 190. Followed by Jio at Rs 177.2; meanwhile, struggling telco Vi is way behind at Rs 131.
The only way to increase the ARPU is by increasing the tariffs, and prepaid plans being the most popular type of plans in India, will be the first ones to see the hike.
It was previously reported that we could see a price increase from Jio and Airtel of up to 10%. That, too, the hikes would be applied consecutively for three years.
Airtel has already removed some of its cheaper plans. For instance, it removed the cheaper Rs 99 plan available in select circles and replaced it with a similar Rs 155 plan.
We could see a similar thing happening with the more affordable 1GB per day plans; the company could increase the price of that plan or remove similar plans altogether to increase ARPU.
Meanwhile, the ARPU figure is also based on the subscribers. In recent times, Airtel and Jio have seen an increase in their subscriber base, while Vi saw a decline. With the advent of 5G services in the country, Jio and Airtel have rapidly expanded their 5G networks, only boosting subscriber inflow from Vi. Vi is facing financial issues and is finding it difficult to deploy 5G networks in the country.