Airtel follows Jio, hikes tariffs by up to 20%

Bharti Airtel on Friday hiked tariffs for all mobile prepaid and postpaid plans as the telecom operator looks to increase its average revenue per user (ARPU) to above ₹300.

Airtel says the mobile average revenue per user (ARPU) needs to be upwards of ₹300 to enable a financially healthy business model for telecom companies in India. Airtel's mobile ARPU increased to ₹209 in Q4 FY24 as against ₹193 in Q4 FY23, led by a sustained focus on acquiring quality customers.

"We believe that this level of ARPU will enable the substantial investments required in network technology and spectrum and offer a modest return on capital," India’s second-largest telecom operator says.

This comes a day after India’s largest telecom operator, Reliance Jio, introduced new mobile data plans with higher tariffs of up to 25% from July 3, 2024.

Airtel says it welcomes the announcements in the industry to "repair tariffs." Airtel will also revise its mobile tariffs from July 3, 2024. "We have ensured that there is a very modest price increase (less than 70 paisa per day) on the entry level plans, in order to eliminate any burden on budget challenged consumers," the Gurugram-based company says.

Airtel has hiked the monthly tariff for its popular postpaid family plans. The ₹999 postpaid plan for four connections with 190 GB of data will now cost ₹1,199, up by 20.02%. The ₹599 plan for two family connections is now priced at ₹699. Both these plans offer 100 SM per day, Xstream Premium subscription, Disney+Hotstar subscription for 12 months, Amazon Prime subscription for 6 months and Wynk Premium membership.

The ₹265 plan, which comes with a validity of 28 days and offers 1 GB of data every day, will cost ₹299. The ₹399 plan, which offers 3 GB of data daily, will cost ₹449. The unlimited voice plan of ₹179 has now been priced at ₹199. These prices apply to all circles, including Bharti Hexacom circles.

India’s second-largest telecom operator strengthened its leadership position in the postpaid segment with a customer base of 51.2 million.

In comparison, Jio's cheapest monthly plan currently costs ₹155 for 2GB of data and is valid for 28 days. The price of this plan has been hiked to ₹189—an increase of 22%. The tariff of Jio's ₹239 monthly plan, which offers 1.5 GB of data per day, has been hiked by 25% to ₹299. The ₹399 plan which offers 3GB data per day will now cost ₹449, recording a 12% rise. Jio offers two post-paid plans currently: the ₹299 per month post-paid plan is now priced at ₹349 while the ₹399 plan will now cost users ₹449.

“Our return on capital employed continues to remain low due to the absence of tariff repair in the industry,” Gopal Vittal, managing director of Bharti Airtel, said in May. Net profit of Bharti Airtel slipped 31% year-on-year to ₹2,072 crore for the quarter ended March 31, 2024, compared with ₹3,006 crore in the same quarter last year. For the full fiscal, profit fell 10.5% to ₹7,467 crore in FY24 from ₹8,346 crore in FY23.