Airtel increased tariff in many states, introduced new entry level plan

Bharti Airtel, the country’s second largest telecom company, has introduced a new entry level plan of Rs 155 in seven regions. Due to this, the basic tariff has increased by about 57 percent. This plan is for seven regions including Karnataka, Bihar and Rajasthan. The company has abolished the tariff of Rs 99.

The company had launched the new plan on a trial basis in Odisha and Haryana last year. After spending billions of dollars of telecom companies in the auction of 5G spectrum last year, these companies need to increase the tariff to increase the revenue. A key indicator of performance for telecom companies is Average Revenue Per User (ARPU). For Airtel, it stood at Rs 190 in the September quarter, up 3.8 per cent on a quarter-on-quarter basis and nearly 24 per cent on a year-on-year basis.

Airtel’s rival Reliance Jio’s ARPU was Rs 177.2 in the September quarter and has marginally increased to Rs 178.2 in the December quarter. Reliance Jio started competing to reduce tariffs after entering the telecom sector six years ago. Due to this, other telecom companies also had to reduce the prices of their services. This had a major impact on the revenue and profit of these companies. Because of this, some telecom companies went out of business and some were merged. There are three big private companies in the telecom market.

Both these telecom companies have set a target of converting 150 million mobile phone users to 5G by March next year. Both these companies are increasing their 5G coverage. Executives and analysts associated with the telecom industry say that the next financial year will bring a big change for telecom companies. Along with increasing the scope of their 5G service, these companies will also focus on improving their network. These companies can invest Rs 1.5 lakh crore in the next financial year. Over the past three years, some companies have exited the debt-laden sector. Late last year Telecom Secretary K Rajaraman said, “This year has been exciting because of 5G. This is a big step forward. We are looking forward to the rapid expansion of 5G next year.” He had informed that the government will continue to take measures to reduce the cost of operations of telecom operators. This will increase the margin for these companies, which are burdened with debt.

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