Airtel And Vodafone Have Made Tariff Plans Expensive for Their Customers
Airtel has 350 million and Vodafone-Idea over 270 million customers across the country. Both companies have made tariff plans expensive to increase the Average Revenue Per User (ARPU).
Four days ago, the company had announced to make its prepaid plan expensive. In such a situation, from today all the 12 prepaid plans of the company became expensive. Now customers will have to spend a minimum of Rs 20 and a maximum of Rs 501 or more for recharge. Vodafone-Idea has also implemented new prices on the old plan. The plans and prices of both the companies have become almost the same.
Why did Companies make tariff plans expensive?
Reason 1: Bharti Airtel and Vi India are at a loss. Airtel had taken a loan of Rs 93.40 thousand crores as of March 2021. At the same time, Vodafone Idea had taken a loan of Rs 1.90 lakh crore till the June quarter. These loans include Adjusted Gross Revenue (AGR). The Supreme Court on the AGR matter has given 10 years to all the telecom companies to clear the dues. Airtel has raised Rs 21,000 crore through a rights issue in October. On the other hand, Vodafone is planning to raise 20 thousand crores from last year, but so far it has not got investors.
Reason 2: Telecom companies want to increase the Average Revenue Per User (ARPU). Because of this, it will help them to deal with the crisis. Even banks are not giving loans to Vodafone. Airtel leads in earnings per subscriber with Rs 155. Its target is to take it to Rs 180 by January. With the new plan, Airtel's per subscriber earnings will be Rs 165. That is, Rs 10-10 extra will be available from 35 crore customers. This will increase his revenue. Similarly, Vi's earning per customer is Rs 109. He will also get 10-10 rupees extra from all the users.
The problem faced by Telecom Companies
Mahesh Uppal, the Telecom expert and Director, said, "Telecom companies in India have two problems. First, the Average Revenue Per User (ARPU) of companies is the lowest in the world. There is some way to increase the ARPU. Now the challenge in front of the company is that if the competitor does not increase the price, then its business will get affected. The second problem is that prices matter a lot to the people of the country. Many customers want to keep the cost of telecom to the same level. For example, Airtel and Vi have increased the prices, but if Jio does not make their plans expensive, then it can be a loss for both the companies. The good thing for the companies is that now there is less competition in the market and companies can focus on data revenue."
Which company is best?
If we compare the prepaid plans of all the three companies, then Reliance Jio is the best. After November 25, the plans of Vi India and Bharti Airtel will be almost identical. Jio is Rs 24 cheaper than Airtel and Vi in the cheapest plan. At the same time, Jio is cheaper by Rs 500 to 600 from both the companies with the annual validity plan.