Telecom giant Bharti Airtel, on Friday, announced a substantial hike in its mobile tariffs, effective from July 3. The revised prices will affect both prepaid and postpaid plans, marking a significant change in the pricing strategy of one of India’s leading telecommunication companies. This move follows a similar increase in tariffs recently announced by its competitor, Reliance Jio, signaling a broader industry trend.
Starting with prepaid unlimited voice plans, Bharti Airtel has raised the tariffs across various packages. The plan priced at Rs 179 will now cost Rs 199, the Rs 455 plan has been increased to Rs 599, and the Rs 1,799 plan has been raised to Rs 1,999. These changes reflect a substantial jump that will impact a large section of Airtel’s user base.
In the postpaid segment, the changes are equally noteworthy. The Rs 399 postpaid plan will increase to Rs 449, the Rs 499 plan will now be Rs 549, the Rs 599 plan is raised to Rs 699, and the Rs 999 plan is now priced at Rs 1,199. All these hikes will be effective from July 3, giving customers a brief period to come to terms with the new tariff structure.
In their official statement, Bharti Airtel emphasized the necessity of the tariff hike for sustaining a financially healthy business model. “We have maintained that the mobile average revenue per user (ARPU) needs to be above Rs 300 to ensure a financially viable business model for telecom companies in India,” the company stated. This ARPU target is seen as crucial for the substantial investments required in network technology and spectrum, as well as for offering a modest return on capital.
Airtel believes that reaching this level of ARPU will enable the company to continue investing in advanced network technologies and expanding its spectrum. “We believe that this level of ARPU will enable the substantial investments required in network technology and spectrum and offer a modest return on capital,” added Bharti Airtel in its statement.
The announcement caused a mild uptick in Bharti Airtel’s shares, which rose by around 1 percent to trade at Rs 1,491 apiece during early morning trading.
. This positive market reaction suggests that investors view the tariff hike as a step towards stronger financial health for the company.
Reliance Jio, one of Airtel’s primary competitors, had earlier announced a similar increase in mobile tariffs, ranging from 12 to 27 percent. This previous announcement set the stage for what appears to be a concerted move by the major players in the industry to boost revenues through higher tariffs.
The tariff hikes by both Airtel and Jio indicate a broader trend within the telecommunications sector in India. These companies have been investing heavily in expanding their networks and upgrading their technologies, including the rollout of 5G services, which require significant capital expenditure. The increased tariffs are likely a result of these growing financial demands.
Industry analysts suggest that while the immediate impact of the tariff hike might include some customer dissatisfaction and potential churn, the long-term benefits could outweigh these initial challenges. Higher ARPU levels could lead to improved service quality as telecom operators reinvest in their networks. Additionally, it could drive the industry towards more sustainable pricing practices, rather than the fierce price competition that has characterized the market in recent years.
Customers, however, will need to adjust to the new pricing landscape. With both Airtel and Jio increasing their tariffs, consumers will have fewer alternatives if they wish to switch providers in search of cheaper options. Smaller telecom operators might see this as an opportunity to attract cost-conscious customers, but their ability to scale up and compete with the giants remains limited.
In conclusion, Bharti Airtel’s recent announcement of a substantial hike in mobile tariffs marks a pivotal moment for the company and the Indian telecom industry at large. Effective from July 3, these new tariffs are aimed at ensuring a sustainable business model that supports the heavy investments required for technological advancements and network expansion. As the industry braces for these changes, both companies and consumers will need to navigate this evolving landscape carefully.
