Bharti Airtel’s aim to further hike by ARPU by 50 per cent to shoot up tariff plans

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Bharti Airtel, CEO, Gopal Vittal, has said the private telecom player is looking to increase the average revenue per user (ARPU) from the current Rs 200 to Rs 300 in the long term. ARPU is the average revenue that telecoms earn from one customer. If Bharti Airtel is to accomplish an ARPU of Rs 300, then, it will be only possible if it raises its mobile tariffs.

Bharti Airtel already has the highest ARPU in the country. In last one year, the telecom has increased its ARPU more than its rivals.

Airtel increased its ARPU by 9 per cent year-on-year (YoY) to Rs 200 in Q1 FY24 from Rs 183 in Q1 FY23.

Rival, Reliance Jio’s ARPU stands at Rs 180.5 in Q1 FY24 up only 2.8% YoY in year ago period. Vodafone Idea has also not seen this much growth in ARPU. VI’ ARPU stood at Rs 135 in Q4 FY23 up 9 per cent YoY from Rs 124 in year ago period.

But still, Airtel wants to increase ARPU by further 50 per cent to Rs 300 from current levels of Rs 200. This will be only possible if Airtel raises its tariffs.

Vittal said, “A big increase in ARPU can happen with result of tariff table hike. We are at lowest table in the world. Hiking entry level prepaid recharge plan from Rs 99 to Rs 155 gave us small upside in ARPU.”

Bharti Airtel has seen maximum increase (of Rs 17) in ARPU in last one year.

Vodafone Idea too has increased its earning metrics by 9 per cent YoY to Rs 135 in Q1 FY23 from Rs 124 in Q1 FY24. Despite it, the Mumbai baaed telecom has lowest ARPU among the top three players in the industry.

Reliance Jio on the other hand has seen its ARPU rise by only 2.8 per cent during this one year period. Its ARPU is currently at Rs 180.5 in Q1 FY24.

ARPU increase of top 3 telecoms:

Airtel has the highest ARPU in the country. And so, it has the costliest entry-level prepaid recharge plan of Rs 155. While, rival Reliance Jio’s entry level recharge plan costs Rs 149, while, Vodafone Idea’s recharge plan costs Rs 129. But, these telecoms have over the years decreased either data or validity of these packs. As a result, customers are now getting lower value on such low cost prepaid plans.

Vittal said, “Rs 239 entry level plan is the only plan which comes with meaningful data.”

All the top three telecoms especially Airtel are off-late trying to move customers to high level prepaid plans or to postpaid plans. Either, have these telecoms straightaway raised the tariffs or they have reduced validity or data.

Vittal said, “ARPU increases by 75 per cent every time customers shift to postpaid from prepaid.” Airtel has been outspoken on increasing its ARPU. Other telecoms don’t out rightly say so but, their strategies have been the same!