Airtel metered tariff discontinued, entry-level tariff Rs 155 with unlimited voice

Bharti Airtel Ltd, which has gradually raised entry-level tariffs from ₹99 to ₹155 in 18 out of 22 telecom circles, plans to do the same for the remaining circles as well, an industry executive said.

“It’s only a matter of time before they make it applicable in all circles,” the executive said on the condition of anonymity.

Indian telecom coverage area is split into 22 circles, mostly aligned with the states’ boundaries.

The Sunil Mittal-promoted company raised the entry-level tariff to ₹155 in Odisha and Haryana on 21 November, followed by Karnataka, Bihar, the North-East, Himachal Pradesh, Andhra Pradesh, Rajasthan and Uttar Pradesh-west on 24 January; and Delhi, Mumbai, Tamil Nadu, Chennai, Uttar Pradesh-east, West Bengal, Punjab, Jammu and Kashmir, and Assam a day later.

“In line with our focus on providing a better customer experience, we have discontinued the metered tariff and introduced an entry-level plan of ₹155 with unlimited voice, 1GB of data and 300 SMS. Customers can now use this plan with no constraints. We believe this plan will provide greater flexibility, convenience and superior value,” an Airtel spokesperson said in response to a query.

An Airtel executive told Mint recently that the carrier had seen less-than-anticipated churn after introducing the plan and would extend it to other circles. “We thought we would see an elevated level of churn or SIM consolidation, but the churn is much lower than what we thought it would be. The pilot is still ongoing. If it all works, then we will assess when to roll it out (to other circles),” the executive said, adding that customers were sticking on because of larger benefits, including higher data usage and unlimited calling, compared to the previous plan.

SIM consolidation takes place when people using more than one SIM stop using their second or third SIM.

Raising entry-level tariffs appears to have worked for Bharti Airtel, as it saw 100,000 and 200,000 active subscribers being added in Haryana and Odisha circles, respectively, in November, according to data from the sector regulator and brokerage houses. In comparison, over the preceding six months, May-October, Odisha saw a net addition of 70,000 and Haryana customer base recorded a loss of 300,000, signifying the low impact of the changed plans, ICICI Securities said in a note.

The change, which analysts refer to as a correction of baseline tariffs, effectively enables the telco to charge more from prepaid customers, who represent the majority of its user base. Telcos last raised tariffs on prepaid plans in November 2021 by 20-25%. “Bharti has gained subscribers and market share in both these circles, implying limited impact of tariff hikes on Bharti’s subscriber base. Bharti’s recent move to raise minimum voice tariffs to ₹155 in seven other circles in January suggests favourable subscriber movements in December as well,” Jefferies said in a note.

According to Kotak Institutional Equities, Airtel’s market share across all circles rose to 32% in November from 31.9% in October, as it added 1 million active subscribers. It had been gaining share each month steadily from 30.4% in November 2021. While No. 1 telco Reliance Jio gained market share despite losing 3 million active subscribers in November, struggling carrier Vodafone Idea lost subscribers as well as market share over the past several months, with its share dropping to 21.3% in November 2022 versus 22.9% in the same month last year.

This would, in turn, pose a question on the viability of another round of hikes that telcos have been wanting to execute.

Sector experts also noted that mobile number portability (MNP) requests continued to inch upwards in November to 12 million and are near peak levels of 13 million seen in March 2021. “High MNP requests amid a stagnant active subscriber base for the sector points to rising competition and focus on market share gains,” said analysts at Jefferies, alluding to Vodafone Idea’s struggle to keep its customer base intact. This comes against the backdrop of its inability to raise ₹20,000 crore to compete better in the market and a much-delayed conversion of interest on a moratorium on ₹16,100 crore dues into equity by the government. “This, in turn, is likely to keep churn levels elevated and drive up S&M (sales and marketing) costs for telcos,” it added. Livemint