Airtel Hikes Basic Tariffs in Seven Regions by Nearly 57 Percent to Increase Average Revenue per User

Bharti Airtel, India's No. 2 telecom carrier by subscribers, has introduced a new entry level plan at Rs. 155 in seven regions, the company's spokesperson said on Tuesday, effectively raising basic tariffs by nearly 57 percent.

The new plan was introduced in regions including the states of Karnataka, Bihar and Rajasthan, after discontinuing the existing tariffs of Rs. 99, the spokesperson added.

The company had late last year introduced the new plan on a trial basis in the states of Odisha and Haryana.

Telecom firms were widely expected to hike tariffs to shore up revenues after having spent billions of dollars in the country's 5G auction last year.

Airtel's average revenue per user (ARPU), a key performance indicator for telecom firms, was Rs. 190 in the September-quarter, a 3.8 percent sequential rise and a roughly 24 percent year-on-year increase.

The ARPU needed to be at Rs. 200 and ultimately at Rs. 300 for a financially healthy business model, Airtel said in November 2021, when it last raised tariffs.

Larger rival Reliance Jio, the telecom arm of billionaire Mukesh Ambani's Reliance Industries, had ARPU at Rs. 177.2 in the September quarter which rose slightly to Rs. 178.2 in the December quarter.

Jio, which disrupted the industry with cut-price rates in 2016, has not yet raised tariffs in over a year.

Airtel is scheduled to report its third-quarter results on February 7.

© Thomson Reuters 2023