Airtel And Vodafone-Idea To Increase Tariffs Of Prepaid Plans: Know When

Airtel and Vodafone-Idea are reportedly planning to increase tariffs of prepaid plans as both are looking for ways to raise money to clear AGR dues. Besides, telcos want to meet all payment obligations. This is why a hike in the prepaid segment seems necessary.

Notably, the Supreme Court of India has rejected AGR review applications of telecom operators. This decision has forced telcos to increase the prices of their plans. In fact, India's second-largest telecom operator Airtel has already removed its entry-level plan from its prepaid list.

Airtel Removes Rs. 49 Prepaid Plan

The telecom operator removes Rs. 49 plan and now, its entry-level plan starts from Rs. 79. However, analysts believe this move by Airtel will force Vodafone-Idea to discontinue Rs. 49 plan from its list in the next few days.

"Airtel could potentially be the first operator to raise prices in the prepaid smartphone segment, and sees a high likelihood of Vi following its actions over the next few days," Goldman Sachs said.

The brokerage firm said that the telcos will increase prices before the calendar year ends as prepaid plans contribute a lot to the telcos' revenues of the telecom operators.

"Vi has already matched Airtel on post-paid and we expect it to follow suit in prepaid. Beginning to aggressively exploit pockets of opportunity that they could have attacked sooner," said IIFL Securities.

In addition, both telecom operators -- Vodafone-Idea and Airtel have to pay the instalments have to pay of the AGR dues by the end of March, which is close to Rs. 9,000 crores and Rs. 4,100 crores, respectively.

Airtel Balance Sheet Is Strong

On the other hand, Goldman Sachs said that Airtel's balance sheet is strong than Vodafone-Idea. The latter is likely to face more financial issues, which is why focusing on increasing tariffs of prepaid plans is important as it helped Airtel to increase revenues.

It is worth noting that both Airtel and Vodafone-Idea actively making changes in their plans; however, India's largest telecom operator Reliance Jio has not made any announcement soon. But, it is expected that soon Jio will follow the wagon and make changes in its offerings.