Bharti Airtel: Just one day after market leader Reliance Jio implemented a tariff hike across the board, Bharti Airtel stated on Friday that it would be raising mobile rates by up to 20% as of July 3.
The telecom provider revealed new rates that indicate unlimited calling plans will cost 11–20% more in both the prepaid and postpaid markets.
Jio increased its tariffs by 12-25% on Thursday, with the new rates taking effect on July 3 for both telecom companies.
Airtel announced a new tariff increase on Friday, with the ₹179 plan, which includes 2 GB of data and unlimited voice calling, rising by 11%. This raises the price of Airtel’s cheapest monthly plan to ₹199. Other plans, ranging from ₹455 to ₹1799, have also seen similar rate hikes.
In the postpaid segment, typically seen as a premier category, the telco has increased the tariffs of its ₹399, ₹499, ₹599, and ₹999 plans by 12.5%, 10%, 16.6%, and 20%, respectively. Additionally, prices for plans in the annual and data add-on categories have also been raised.
Arpu Argument
Airtel stated that the tariff hike is necessary to increase the Average Revenue Per User (ARPU) in the mobile segment to over ₹300.
This will facilitate a financially healthy business model for telecom companies in India. We believe that this ARPU level will support the substantial investments needed in network technology and spectrum, while also providing a modest return on capital,” the company said.
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Airtel’s key performance metric, ARPU, increased by 8.2% year-over-year to ₹209 by the end of Q4 (January-March) FY24. Airtel maintains the highest ARPU among India’s top telecom players, surpassing Jio’s ₹181.7 and Vodafone Idea’s ₹146. However, ARPU growth had slowed in recent quarters, rising only slightly from ₹208 in Q3.
Jio’s ARPU remained steady at ₹181.7 for three consecutive quarters until March 2024.
“We appreciate the industry’s efforts to adjust tariffs. Airtel has implemented a minimal price increase (less than 70 paise per day) on entry-level plans to lessen the impact on budget-conscious consumers,” Airtel stated.
Long time coming
The recent tariff increase aligns with analysts’ expectations following the general elections. As of the end of April, Airtel held a 33.1% market share of wireless subscribers in India, with 386.51 million connections out of a total of 1.16 billion mobile phone connections nationwide. In comparison, Jio had 472.42 million subscribers.
This tariff hike is also expected to impact the pace of 5G adoption in the country. Both Airtel and Jio have been offering 5G services at 4G prices. By the end of the fourth quarter (January-March) of FY25, Jio reported 108 million 5G customers, while Airtel had 72 million 5G subscribers.
