Airtel rationalises prepaid portfolio, move seen lifting tariffs by 3-4%

Synopsis

Bharti Airtel has discontinued several popular prepaid recharge plans nationwide. This move effectively increases Airtel's tariffs by three to four percent. The Rs 299 plan's discontinuation is expected to have the biggest impact. Following this revision, Rs 349 becomes the cheapest unlimited prepaid plan. This rationalisation aims to encourage subscribers towards higher-value recharge packs.

Airtel rationalises prepaid portfolio, move seen lifting tariffs by 3-4%

Mumbai: Bharti Airtel has undertaken one of its biggest prepaid portfolio rationalisations in recent years discontinuing several recharge plans including the popular Rs 299 pack. The move effectively raises Airtel’s tariffs by 3%-4% and will support average revenue per user (ARPU) growth in the coming quarters, analysts said.

The telecom operator has withdrawn the Rs 299, Rs 319, Rs 579, Rs 619 and Rs 649 prepaid plans nationwide from Tuesday. The Rs 799 plan was phased out four months ago, while the Rs 859 plan has been repriced to Rs 899, according to channel checks done by ET.

The biggest impact is expected from the discontinuation of the Rs 299 plan, which served as Airtel's entry-level unlimited 28-day pack offering 1.5 GB of data per day. Following the revision, the Rs 349 recharge, which offers 1.5 GB of daily data, becomes the operator's cheapest unlimited prepaid plan. Airtel’s entry-level data plan offering 2GB data for 28 days remains the same for Rs 199.

The company has also withdrawn certain 56-day and 90-day prepaid plans that saw relatively low customer adoption, indicating a broader effort to simplify its prepaid portfolio.

This rationalisation comes weeks after Airtel introduced its high-speed postpaid Fastlane plan with a focus to drive customer premiumisation and ARPU growth.

Shashwat Sharma, MD & CEO, Airtel India, said that the industry's pricing architecture needs a repair with a data consumption-driven charging mechanism.

“I think the pricing architecture will have to repair with charging for data consumption becoming the norm if we are to see this kind of long-term sustainability,” Sharma had said during the company’s recent earnings call. “This is paramount for sustained ARPU growth in the longer term.”