CHENNAI: Bharti Airtel has initiated what is likely to be the start of the long-expected round of tariff hikes in the price-sensitive prepaid mobile services segment. With the removal of the interconnect usage charge (IUC) in January this year significantly reducing the average revenue per user (ARPU) metric across all private telcos, analysts expect that Airtel’s private sector rivals-Reliance Jio and Vodafone Idea-are likely to follow suit.
Prepaid tariffs had last been hiked in December 2019. On Wednesday, Airtel announced that it has discontinued its Rs 49 entry level prepaid recharge and that “prepaid packs will now start from the Rs 79 smart recharge and offer up to four times more outgoing minutes of usage to customers along with double data”. The announcement saw the company’s share value spike 5% on stock markets.
Top executives from the telecom sector and analysts have pointed out that margins remain quite weak for telcos and that a round of tariff hikes is essential for the sector’s health. In fact, in a press conference in early July this year, Bharti Airtel’s chairman Sunil Mittal had said that tariffs need to go up because the sector was in a tremendous amount of stress. However, he had also noted that such tariff increases could not be done unilaterally.
This Monday, Vodafone Idea had followed Airtel in tweaking its mobile service postpaid plans for its enterprise customers.