Airtel increases mobile rates to arrest falling ARPU

Bharti Airtel, the leading cellular service provider in
India, is set to revise its prepaid mobile tariffs for its Advantage pack and
Turbo plans from July 22.

The telecom operator will increase the tariff for Airtel
to Airtel mobile calls to 60 paise per minute from the present 50 paise in most
of its cellular circles.

Rate for Airtel to other mobile calls will be slashed to
60 paise from the present 75 paise in circles including Mumbai.

Airtel to landline rate will be increased to 90 paise
from 75 paise.

Local SMS rate will be Rs 1 and STD SMS will be available
for Rs 1.50.

All new customers enrolling in these packs will be
charged on the revised tariffs. Existing customers will continue to avail the
existing tariffs till the expiry of their tariff validity period. Customers
will have the option to select any alternative tariff or migrate to the revised
tariff after the expiry of their current tariff validity period.

The telecom industry feels that increase in tariff is important to sustain in the highly competitive market with almost 13 players in all circles. Other operators are likely to follow suit.

The revision in cellular tariff is important for Airtel
which has more than 167 million subscribers as on May 31, 2011. More than 95
percent of Airtel customers are on pre-paid plans.

ARPU of Airtel saw a decline to Rs 194 in FY 2011 from Rs
220 last fiscal, while minutes per user also declined to 449 from 468 last
year. Non-voice revenues saw an increase of 15 percent, as compared to 11.8
percent last year, while monthly churn also decreased slightly to 7.6 percent
in March 2011, as compared to 7.8 percent in December 2010.

According to analysts, Airtel carried 211.8 billion
minutes on its network during the quarter with 12.7 billion incremental minutes
over the previous quarter. This enabled Airtel to sustain our minutes of use
per customer per month at 449.

Non-voice revenues as a percentage of mobile revenues in
India have witnessed an increase from 13.8 percent in Q3 to 15 percent in Q4.

With total revenues at Rs 59,467 crore, up by 42.1
percent y-o-y for FY11, and India and South Asia revenue growth increasing by
11 percent y-o-y, Bharti Airtel has registered a full year revenue of over $10

The revision in tariff is likely to positively impact the
margins. In Q4, consolidated EBITDA margin showed an improvement at 33.5
percent, from 31.6 percent in Q3 FY11. However, the EBITDA margin decreased by
6.5 percent over the year due to an increase in spectrum charges in India, weak
3G uptake, and lower margins from Airtel’s African operations. 

By Team
[email protected]



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