Prepaid Customers Are Opting For Monthly Plans Post Price Hike

To increase their average revenue per user (ARPU), telecom operators have recently surged tariff prices of prepaid plans. But now, it seems that prepaid subscribers are opting for monthly recharges, rather than long-term plans.

"If customers are going for one month recharges instead of three months, their mobile costs will be up by 40-50 percent per month," said Rajiv Sharma, head of research at SBICap Securities to the Economic Times. Adding to that, "For telcos, this is good news as ARPU targets will do better than expected before they stabilize."

However, sources close to the development also believe that these customers might easily switch to other operators, and there are also chances that they will change their operator in a month. As private players are offering discounts and freebies on one-year plans.

This is the reason that Reliance Jio has recently revised its Rs. 2,199 plan to Rs. 2,020 for a limited period. With this plan, the company is offering 1.5GB data per day, free SMS, and access to its apps such as JioTV, JioCinema, and JioNews. This plan is valid for 365 days.

Besides, the company has launched the same plan for its JioPhone users. The newly launched Jio Happy New Year plan offers unlimited calling and 0.5GB data for 365 days. In addition, users will get access to all Jio apps and free SMS for the same duration.

"The customer who could afford a mobile plan of about Rs 300 for 84 days is now recharging for the one-month plan because he cannot afford the Rs 500-plus expense," a Mumbai-based distributor for Bharti Airtel was quoted by the newspaper. Adding to that, "In a price-sensitive market, it will take a few months for consumers to understand the effect of the new tariffs."