Bharti Airtel follows Jio in raising tariffs, hikes prices by 20%

Bharti Airtel on Friday announced a hike in mobile tariffs by up to 20 per cent effective July 3, just a day after market leader Reliance Jio effected an across the board hike in tariffs.

New prices announced by the telcom operator showed unlimited calling plans will become dearer by 11-20 per cent across the prepaid and postpaid segments.

Jio had raised tariffs by 12-25 per cent on Thursday. Both telcos have set July 3 as the date for the new tariffs to go live.

In the latest tariff increase announced by Airtel on Friday, the ~179 plan, which offers 2 GB data along with unlimited voice calling, has gone up 11 per cent. That raises the price of Airtel’s cheapest monthly plan to ~199. Prices of other plans ranging from ~455 to ~1799 have seen a similar hike in rates.

In the postpaid segment, generally considered a premier category, the telco has raised tariffs of its ~399, ~499, ~599 and ~999 plans by 12.5 per cent, 10 per cent, 16.6 per cent, and 20 per cent, respectively. Prices of plans in the annual and data add-on categories have also been raised.

Arpu argument

Airtel said the hike has been necessitated by the need to raise the Average Revenue Per User (Arpu) in the mobile segment beyond Rs 300.

“This will enable a financially healthy business model for telcos in India. 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,” the company said.

A key performance metric for telecom firms, Airtel’s Arpu had risen 8.2 per cent Y-o-Y to Rs 209 at the end of the Q4 (January-March) of FY24. Airtel’s Arpu is the highest among the country’s top telecom players, beating Jio’s Rs 181.7 and Vodafone Idea’s Rs 146. However, APRU growth had stagnated in recent quarters, rising only marginally from Rs 208 in Q3.

Jio’s Arpu stagnated at Rs.181.7 for three quarters till March, 2024.

“We welcome the announcements in the industry to repair tariffs. We have ensured that there is a very modest price increase (less than 70 paise per day) on the entry level plans, in order to eliminate any burden on budget challenged consumers,” Airtel argued.

Long time coming

The latest move is in line with analyst expectations of a tariff hike after the general elections. As of April-end, Airtel had a 33.1 per cent market share of the wireless subscribers in India, official data shows. As many as 386.51 million of the 1.16 billion total mobile phone connections in the country run on the Airtel network. Meanwhile, Jio had 472.42 million subscribers.

The hike is also set to influence the pace of adoption of 5G in the country. Both Jio and Airtel have offered 5G service at 4G prices. Jio had 108 million 5G customers at the end of fourth quarter (January-March) of FY25, while Airtel had 72 million 5G subscribers.