Telecom Connect: Indirect Tariff Hikes , A Move Towards ARPU Growth

India Ratings and Research (Ind-Ra) has published the August 2021 edition of its credit news digest on India's telecom sector. It highlights the trends in the telecom sector, with a focus on subscriber additions, subscriber market share, broadband subscribers, data usage, pricing and regulatory and industry updates.

Bhart Airtel Revision in Select Tariff Plans

A Move Towards Indirect Tariff Hikes and ARPU Growth: The revision in the floor prices for select pre-paid and post-paid plans by Bharti Airtel Limited in July 2021 will support its average revenue per user (ARPU) growth in the medium to long term.

This is because the telco is less likely to face competition from Reliance Jio Infocomm Limited owing to almost similar entry-level plans in the pre-paid category and the sticky nature of subscribers in the post-paid category.

Bhart Airtel discontinued its entry-level Rs 49 pre-paid tariff plan in the last week of July and now the Rs 79 smart recharge plan becomes the entry-level plan for Bhart Airtel pre-paid customers (94.7% of customers in June 2021). On the other hand, for post-paid plans, the telco also discontinued its INR749 family plan and now only INR999 family plan is available, while the entry-level plan for corporate customers was also revised to INR299 from INR199 and INR249 in July 2021.

The agency believes Bharti Airtel step of indirect tariff hikes indicates that the industry is moving towards a higher ARPU regime, the report has said.

More details on the sector can be had from the India ratings report.