Bharti Airtel’s Entry-Level Prepaid Plan To Cost More In ARPU Boost

Bharti Airtel Ltd. discontinued an entry-level prepaid plan to indirectly raise pricing, days after it similarly made postpaid plans costlier for users.

The operator phased out its Rs 49 prepaid recharge plan, and the pack will now start from Rs 79, according to its statement. The revision will be effective July 29.

The company had similarly revised pricing of its retail and corporate postpaid plans last week. The operator has in effect increased entry-level prepaid pricing by 61.2% and postpaid cost by 20-50%.

The Rs 79 prepaid plan will offer up to four times the outgoing minutes and twice the data at 200 MB compared to the discontinued plan. Tariff applicable will be 1 paisa a second against 2.5 paisa in the phased-out plan. It will be valid for 28 days.

Vodafone Idea Ltd.’s entry-level Rs 49 plan with 28-day validity offers 100 MB data with Rs 38 talk time. Though not comparable because of higher data allowance, Reliance Jio’s 28-day entry-level 2GB plan (non-JioPhone) is available for Rs 129 for prepaid and 199 for postpaid users (one-month validity). The minimum price for JioPhone users is Rs 75 for 28 days.

“Bharti is well-positioned to increase mobile ARPU as subscribers migrate from 2G to 4G. 4G penetration is expected to surge to 85% by FY24, which would further support ARPU improvement,” said a recent HSBC report. Increase in prices are less likely to create an increase in the churn rate is positive, it said.

Vi, as Vodafone Idea has been rebranded, may soon follow suit as it struggles under its liabilities. Tariff hike is critical for its survival after the Supreme Court rejected applications to seek correction of computational errors in adjusted gross revenue. The decision could also impact Vi’s impact on its potential fundraising efforts.

Bharti Airtel had already made full provisions for dues stemming from new AGR definition, HSBC said, adding that there shouldn’t be any downside risk to estimates due to this decision.

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