Airtel to make changes in post-paid plans to improve ARPU

Telecom operator Bharti Airtel is planning to make changes in its post-paid plans for its phone customers – targeting to improve ARPU.
Airtel post-paid mobile plansLess than 5 percent of Airtel’s 284 million mobile phone customers are on post-paid plans who pay a fixed monthly fee to the telecom operator. Earlier, Airtel started removing low-ARPU customers from its pre-paid plans.

Airtel will be gradually phasing out of its post-paid offerings that are less than Rs 499 and retaining limited number of plans above it, PTI reported. This move will assist the number one telecom operator – based on revenue – to shift some of the post-paid customers to pre-paid plans.

The move is aimed at simplification of plans and would also help the company chase better realisation from mobile subscribers, improving the ARPU. The company is in the process of phasing out post-paid plans of less than Rs 499, as other plans pack in more value and digital content for subscribers willing to shell out a tad bit more.

Airtel has scrapped the Rs 299 plan and is in the process of gradually phasing out Rs 349 and Rs 399 post-paid plans. The number of plans above Rs 499 will be reduced to three — Rs 749, Rs 999 and Rs 1,599.

The company is in the process of raising Rs 25,000 crore through a rights issue for expanding its networks.

A report from SBICap Securities indicated that Airtel’s mobile ARPU has increased by about 20 percent quarter on quarter. Reliance Jio’s ARPU declined about 3 percent during the March quarter of 2019. Vodafone Idea’s ARPU for the March quarter rose 16.3 percent to Rs 104 from Rs 89 in the October-December 2018 period.

“Subscriber traction is something that Bharti needs to pick up, as ARPU gains incrementally may be much lesser but may still continue, driven by upselling for low-end subscribers and 2G-to-4G upgrade,” SBICap Securities said in a the report.

Airtel’s total revenue rose 6 percent to Rs 20,602 crore during the March quarter against Rs 19,394 crore in January-March 2018.

The company said that the Indian mobile revenue has also grown by around 3 percent to Rs 10,632 crore during the quarter as compared with Rs 10,353 crore in the fourth quarter previous year.

A recent report by Bank of America Merrill Lynch (BofA-ML) said Capex for Bharti Airtel and Reliance Jio is expected to decline. Investments and focus on fixed broadband and enterprise business have increased for both Bharti Airtel and Reliance Jio.

Airtel, Vodafone Idea and Reliance Jio are focussing on select areas to improve the network and add subscribers, instead of adopting a carpet rollout approach.