Be ready to spend more on your mobile phone recharge from next month as the two leading telecom operators — Airtel and Vodafone Idea — are set to increase the prices of their recharge plans. Airtel has already scrapped its entry level monthly prepaid plan, starting from Rs 49. The base level plan now starts from Rs 79, up by 60 per cent, for Airtel customers. Last week, the leading telecom operator has hiked the rate of entry- level plan for its postpaid users and corporate customers. Tariffs in minimum corporate plans have been increased by 30%.
Vodafone Idea is also planning to tweak the basic prepaid plans, according to industry experts. The cash-strapped telecom operator has changed the base level recharge price in few circles. In Maharashtra and Gujarat, Vi has reduced its Rs 49 plan for 14 days, instead of earlier 28 days. Vi customers need to pay Rs 79 for 28-day plan now in the mentioned areas. The leading telecom operator will soon expand the changes in pre-paid plans across the country. Following Airtel’s move, it has recently reduced data benefits under its ‘Business Plus’ postpaid plans for its enterprise customers.
The move comes as telcos are looking for various ways to improve cash generation to meet the upcoming adjusted gross revenue (AGR) dues. Vodafone Idea and Airtel have to pay the first installment of adjusted gross revenue dues of around Rs 9,000 crore and Rs 4,100 crore respectively by March 22.
The hike will help the telecom giants to improve average revenue per user (ARPU). “Bharti Airtel is increasing tariffs rate for the enterprise segment, which account for around 60% of postpaid users. This would boost overall average ARPU for BAL. Going forward, we expect Bharti Airtel to report healthy top-line and bottom-line growth on the back of a strong brand, growth in customer additions, and improvement in ARPU,” Amarjeet Maurya, AVP, Mid Caps, Angel Broking Ltd said earlier.
“Bharti Airtel has raised the postpaid tariffs for its corporate plans as well as tweaked its retail postpaid and select prepaid plans; as per our estimates, this change in plans can result in 3% increase in Wireless EBITDA. With a 20–25% ARPU increase in the postpaid category, which contributes 12% to revenue, the overall increase in revenue/EBITDA could be to the tune of 3% – assuming a 60% incremental margin for the Wireless business. However, at the consolidated level, the company would see an increase of 2%. This benefit is based on the assumptions that a tariff hike would be announced by peers, resulting in limited churn, and the rate of churn would be lower in the Postpaid category,” Motilal Oswal said in a note after Airtel tweaked its postpaid plans last week.
The total number of customers for Airtel stands at 348.29 million in June, according to the data by the telecom operator. Vodfone Idea has 277.62 million customers as of May 31.
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