Airtel hikes entry pre-paid tariffs after 20 months – Times of India

NEW DELHI: Airtel hiked minimum tariffs for pre-paid customers after nearly 20 months, the decision coming days after the company had made changes to charges on post-paid enterprise and family-mobile packs.
The move displays a willingness on the part of the debt-laden telecom operator to take the tariffs up in India, which has one of the world’s lowest charges on mobile telephony, even as companies struggle with debt and losses.
However, Airtel is still avoiding a full-fledged tariff hike in view of the tough competition from Reliance Jio, which had originally demolished the traditional business financials of the telecom industry and rolled out services with cheap data prices and free voice.

Airtel, while going for hikes, has been careful and cautious in not disturbing the tariffs for the bulk of the customers.
Wednesday’s cut is for entry-level pre-paid customers whose minimum charges have increased from Rs 49 to Rs 79. The change may not make much of a difference to the company’s margins and to the industry’s critical yardstick of average revenue per user (ARPU) as these are non-data low-paying users.
According to estimates, the population of users who will be impacted by this change will be around 50 million and these are mostly 2G (feature phone) users who use telephony only for voice.
Airtel’s last-recorded ARPU was at Rs 145, though company promoter Sunil Mittal has rued this number, saying the industry needs “at least Rs 200” in the short-term and Rs 300 in the long-term to regain health.
Prashant Singhal, the telecom partner at Ernst & Young India, said the tariff hike by Airtel is “directionally positive for the industry”, and indicates that companies are willing to take steps to shore up their financials.
“We have the lowest tariffs in the world, and the industry is bleeding. To boost the quality of services and enable the companies to participate in 5G and other technologies, companies need profitability and perhaps some tariff rationalisation,” Singhal told TOI.