Vodafone-Idea Likely To Follow Airtel; Increase Tariffs Of Postpaid Plans

Airtel has finally increased the prices of postpaid plans for its enterprises and retail customers. However, analysts said that it might not increase the ARPU and revenue of the company in the near term. In fact, they believe that the step is in the right direction and might repair the industry.

"We believe that near term ARPU benefit is unlikely to be meaningful given the revenue contribution of postpaid subscribers is 12-15 percent of mobile revenues," Credit Suisse said.

Airtel's Postpaid Plans Are Now Up By Rs. 50

Apart from increasing prices of a postpaid plan, India's second-largest telecom operator Airtel has removed few packs from its list. The company has discontinued Rs. 749 postpaid plan for all ts new users and now ships extra benefits with Rs. 999.

"Earlier, subscribers could acquire two SIM cards at Rs 749, with the implied value amounting to Rs 325," Motilal Oswal Financial Services said. "With the 749 plan now being discontinued, the customer could make a purchase of Rs 499 with an add-on of Rs 299, implying a total value of Rs 800," it added.

However, the firm said that removing Rs. 749 postpaid plans will help the telecom operator to increase 7 percent in average revenue per user.

Vodafone-Idea's Might Increase Prices

The firm said that Vodafone-Idea might follow the same and increase the prices of its postpaid packs. It added that Vodafone-Idea plans are aligned with Airtel's old plans. Furthermore, the firm highlighted that Airtel has only 5 percent postpaid users, which contributes 12 percent to the revenues.

For the unaware, Airtel discontinued Rs. 199 and Rs. 249 postpaid plan in the enterprise segment, while Rs. 749 has been removed by the telecom operator in the retail segment. In addition, the company has reduced the extra number of SIMs from its family plans.

It is important to note that Airtel revenue books are better than Vodafone-Idea and the former is expected to be benefitted further from the same decision. The company might increase the ARPU and its market share; however, if Vodafone-Idea delays its plans to increase tariff might affect its market share in the country.