Airtel, Vodafone prepaid users may need to get monthly minimum recharges for calls to continue
Not only are these players looking to boost ARPU, they also do not mind losing low-spending customers who do not generate much revenue for them anyway.
- Nov 1, 2018,
- Updated Nov 1, 2018 12:18 PM IST
Telecom operators like Airtel and Vodafone are finally pushing back Reliance Jio's disruptive pricing strategies. These operators are planning to roll out minimum recharge plans to weed out low-spending customers. Airtel and Vodafone are looking to boost their average revenue per user (ARPU) and focus on profitable customers.
As per the minimum recharge plans, there will a couple of different tariffs, starting at Rs 35 and including Rs 65 and Rs 95 packs. As per a report in The Economic Times, customers who do not recharge on these plans will see their outgoing calls barred in 30 days, following which incoming calls will be stopped in 45 days.
Analysts believe that these operators have finally realised that there have been way too much price disruption over the past two years after Reliance Jio entered the market. Sanjiv Bhasin, Executive Vice President, markets & corporate affairs, IIFL, told the daily that not only are these players looking to boost ARPU, they also do not mind losing low-spending customers who do not generate much revenue for them anyway. He added that they are likely to bank on middle- and upper-tier customers who do not switch services overnight like base-level users.
A person in the know told Livemint that letting go of customers who recharge less than Rs 35 a month will also free up Airtel's network and ease congestion, leading to good quality service for high-paying customers.
On the other hand, rural subscribers have significantly helped Reliance Jio increase its subscriber base. From 46.6 million in end-March to 73.11 million in end-August, Reliance Jio has managed to almost double it rural subscriber base, thanks to its cheap 4G phone and low tariffs.
According to Telecom Regulatory Authority of India (TRAI) data, Airtel holds the largest rural subscriber base with 33.23%, followed by Vodafone with 23.15%, IDEA with 23.10% and Reliance Jio with 12.14%.
Reliance Jio's pricing strategies since September 2016 has forced other telcos to revisit their pricing structure. Needless to say, customers emerged victorious in this price war. But many mobile companies got hit with some even exiting the sector and others merging.
Telecom operators like Airtel and Vodafone are finally pushing back Reliance Jio's disruptive pricing strategies. These operators are planning to roll out minimum recharge plans to weed out low-spending customers. Airtel and Vodafone are looking to boost their average revenue per user (ARPU) and focus on profitable customers.
As per the minimum recharge plans, there will a couple of different tariffs, starting at Rs 35 and including Rs 65 and Rs 95 packs. As per a report in The Economic Times, customers who do not recharge on these plans will see their outgoing calls barred in 30 days, following which incoming calls will be stopped in 45 days.
Analysts believe that these operators have finally realised that there have been way too much price disruption over the past two years after Reliance Jio entered the market. Sanjiv Bhasin, Executive Vice President, markets & corporate affairs, IIFL, told the daily that not only are these players looking to boost ARPU, they also do not mind losing low-spending customers who do not generate much revenue for them anyway. He added that they are likely to bank on middle- and upper-tier customers who do not switch services overnight like base-level users.
A person in the know told Livemint that letting go of customers who recharge less than Rs 35 a month will also free up Airtel's network and ease congestion, leading to good quality service for high-paying customers.
On the other hand, rural subscribers have significantly helped Reliance Jio increase its subscriber base. From 46.6 million in end-March to 73.11 million in end-August, Reliance Jio has managed to almost double it rural subscriber base, thanks to its cheap 4G phone and low tariffs.
According to Telecom Regulatory Authority of India (TRAI) data, Airtel holds the largest rural subscriber base with 33.23%, followed by Vodafone with 23.15%, IDEA with 23.10% and Reliance Jio with 12.14%.
Reliance Jio's pricing strategies since September 2016 has forced other telcos to revisit their pricing structure. Needless to say, customers emerged victorious in this price war. But many mobile companies got hit with some even exiting the sector and others merging.