Bharti Airtel has increased its pre-paid plans by roughly 20%, marking the first step toward improving the sector's financial viability.
Vodafone Idea (Vi) will likely follow suit. Last Monday, its CEO, Ravinder Takkar, stated that tariff increases would be implemented soon. The company, on the other hand, is yet to make an announcement. A few months ago, Airtel and Vi increased pricing on entry-level pre-paid plans, as well as specific postpaid and family plans.
Airtel's latest tariff changes would affect all slabs (Rs 79 to Rs 2,498). It also raised top-up data fees, stating that the new tariff plan would take effect on November 26. Pre-paid customers make up 90-95 percent of Airtel and Vi's client base.
"Bharti Airtel has always maintained that the mobile Average Revenue Per User (ARPU) needs to be at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model," the company announced in a statement on Monday.
"We also believe that this level of ARPU will enable the substantial investments required in networks and spectrum. Even more important, this will give Airtel the elbow room to roll out 5G in India," it added.
Currently, Airtel has the highest ARPU among the telecom operators. In the second quarter of FY 2022, it reported an ARPU of Rs 153. Reliance Jio and Vi said ARPUs of Rs 143.6 and Rs 109, respectively.