Business Today

Speak easy

Airtel’s Rupee One plan sets the cash registers ringing.

Print Edition: February 24, 2008

Keep talking: Itís good news for Airtel
Itís good news for Airtel
For Bharti Airtel, a Rupee spent is much more than a rupee earned. And it shows in the mobile telephony major’s third quarter results, in which profits were up 42 per cent over the previous year’s corresponding period (and almost 10 per cent over the second quarter).

This growth was driven by a near 50 per cent year-on-year growth in the key Mobile Services Business Unit. On a sequential basis too, the segment grew by nearly 11 per cent. The mobile subscriber base of the company also grew by 72.5 per cent year-on-year and by close to 13 per cent quarter-onquarter.

A record 6.4-million subscriber numbers were added during this period, the highest by any telecom company so far. This has helped improve Airtel’s market share to 23.6 per cent (from 21.8 per cent in the quarter ended December 2006).

The trigger for this spike, explain analysts, is Airtel’s Rupee One plan. Says Harit Shah, Research Analyst (IT and Telecom), Angel Broking: “The reduced tariff has brought about an increase in usage.” The average minutes of usage per month per user increased from 469 minutes in the previous quarter to 474 minutes.

Airtel, which had introduced a hugely-advertised Re 1-per-localcall tariff for its lifetime prepaid customers in the second quarter, recently extended it to all prepaid lifetime customers (both new and existing). Airtel has reduced its local outgoing call tariffs to Re 0.99 per minute for all Airtel prepaid mobile customers whose existing local call rates are more than Re 1 per minute. This applies to any local call made from an Airtel prepaid mobile to an Airtel mobile or to any other mobile network in the same circle and to any local landline number. Says Sanjay Kapoor, President (Mobile Services), Bharti Airtel: “We had predicted that usage minutes will go up this quarter because of the Re-1 tariff (from Rs 2 earlier) plan and also because we have made available the Lifetime plan at Rs 499, instead of Rs 999.”

Pallavi Srivastava

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