Expensive calls: Bharti Airtel increases base tariff plans for pre-paid users by 61% to Rs 79

For the second time in almost two years, Bharti Airtel has raised its monthly base tariff plans from Rs 49 to Rs 79. This was done as the price hike pushes the entry level subscribers, mostly 2G users of feature phones to upgrade to a higher level plan like 4G or leave the network. Presently, it has around 55 million users in the Rs 49 plan.

Bharti’s average revenue per user improves

Earlier in December 2019, the company had scrapped the Rs 35 per month entry plan and replaced it with Rs 49 per month plan. This led to a loss of around 35 million users for the network, but its average revenue per user improved. Currently, Bharti’s Average revenue per user is at Rs 145, which is touted to be the best in the industry. However, the management wants the average revenue per user levels in the range between Rs 200-Rs 300 per month.

The country’s second largest telecom operator has been very cautious in rejigging its tariffs to improve its realisations as well as its average revenue per user. For instance, by raising the post-paid tariffs of high end corporate customers last week, the company had negated the risks of downtrading, as the churn rate is very low in this segment. Similarly, in the pre-paid segment Bharti had only raised the prices of the entry level plan, leaving the mid-level plan untouched. This has ensured that the bulk of its pre-paid users which comprise about 95% of the total user base, do not look for other options.

In the entry level, subscribers don’t have a choice for downtrading. For instance Reliance Jio has Rs 69 and Rs 39 monthly pre-paid plans, however, their validity is only for 14 days as against Bharti’s 28 days for the Rs 79 plan.