Airtel Raises Base Prepaid Plan in Maharashtra and Kerala to Rs 155

To raise its average revenue per user while meeting its 5G rollout targets, Airtel has removed the base ₹99 plan in two more circles, namely Kerala and Maharashtra. This move comes just days after the company removed the base plan in 17 out of 22 circles at the end of January. As a result, customers will now have to pay a minimum of ₹155 for the entry-level base plan. That leaves Kolkata, Gujarat, and Madhya Pradesh as the only circles with a lower base plan.

Airtel Raises Base Plan By 56%

As per a report by CNBC-TV18, Airtel has hiked the minimum prepaid recharge plan by almost 50% but will also offer more perks on the new plan. Starting at ₹155, the base prepaid will offer unlimited calling, 1GB of data for 24 days, and 300 messages. On the other hand, the earlier ₹99 plan offered 200MB data and outgoing calls at 2.5 paise per minute for 28 days.

The base ₹155 plan also provides access to services such as Wynk Music and Airtel Hellotunes, the company's caller tunes service.

Airtel started removing the base plan, first in Haryana and Odisha circles, last year in November. Surprisingly, there was an increase in the active subscriber base for the company in those two circles in December by 0.1 and 0.2 million respectively, according to an ET Telecom report.

The company also said it has seen lesser churn after raising tariffs in the two circles. This indicates that customers have accepted the higher price, giving the telco the confidence to raise tariffs across other circles.

Tariff Hikes Essential for ARPU Rise

All three private telecom operators have been keen on raising tariffs on account of the huge capex spends they are undertaking for the 5G rollout. While Airtel has followed suit with its tariff hikes, Reliance Jio is unlikely to do so in the near future as it continues to lose active subscribers across circles.

That said, a tariff hike is the only way for telecom operators to increase their revenues in a significant manner as subscriber additions have plateaued, with the majority of India's adult population now owning a smartphone. Smartphone shipments are also unlikely to pick up in the first half of the year due to dwindling demands.