Bharti Airtel on Monday raised its minimum rate for prepaid users to 99 yen from 79 yen, paving the way for other carriers such as Reliance Jio and Vodafone-Idea to follow suit.
The new tariffs will take effect on November 26, Airtel said in a statement.
Airtel shares closed higher at 742.05 yen per coin on the BSE on Monday, up 3.90% from the previous close.
Airtel’s unlimited plans now start at ₹ 179 (₹ 149 earlier) for 28 days during which the customer will get unlimited calls, 100 texts / day and 2 GB of data.
At the high end, the maximum rate is 2,999 (compared to 2,498 previously) with 365 days validity, unlimited calling, 100 SMS / day and 2 GB / day of data.
Financially healthy model
The telecom operator has always maintained that the mobile ARPU (average revenue per user) should be 200 yen and ultimately 300 yen, in order to provide a “reasonable return on capital” for a financially healthy business model.
“We also believe that this level of ARPU will allow the required substantial investments in networks and spectrum.
“Even more importantly, it will give Airtel leeway to roll out 5G in India,” the phone company said.
The other categories for which an increase has been announced are unlimited voice plans and data top-ups.
The company is increasing rates at this scale after a long period of time, although it has started revisions since July, when it halted 49 prepaid recharge.
Analysts said this price increase was long overdue and is the first step towards “ARPU repair” for Airtel as well as the industry.
“We expect Vodafone Idea and Reliance Jio to follow suit with price increases on prepaid plans. This move should be positive for all key incumbents, including Indus Towers, ”said Ankur Rudra at JP Morgan.
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