[Update: Jio follows suit] Airtel & Vodafone Idea raise prepaid tariffs in India by up to 25%
Calling and mobile data tariffs in India dropped significantly after Reliance Jio entered the telecom sector in 2016. Since then, the three biggest players in the industry — Reliance Jio, Vodafone Idea, and Bharti Airtel — have tried to one-up each other by offering cheaper plans to attract more subscribers. Although that has been great for consumers, the price war hasn’t worked out well for two of the three carriers. As a result, Airtel and Vodafone Idea are now raising the prepaid tariffs by up to 25 percent.
According to a recent Mint report, Bharti Airtel on Monday raised its entry-level voice tariff plan by about 25 percent to ₹99 and increased tariffs for most unlimited voice bundles by 20 percent. With this change, Airtel aims to increase its average revenue per user (ARPU) to ₹200 and eventually to ₹300 “to provide a reasonable return on capital that allows for a financially healthy business model.” Airtels updated tariff plans will go into effect on November 26.
Vodafone Idea soon followed suit and said it would also raise tariffs by up to 25 percent to improve its ARPU. According to ET Telecom, Vodafone Idea is also increasing the price of its entry-level prepaid plan by 25 percent from November 25. The new plan will cost ₹99 and offer users ₹99 worth of talk time, 200MB data, and 1p/sec voice tariff. The price hike will “start the process of ARPU improvement and help address the financial stress faced by the industry,” Vodafone Idea said in a statement.
Reliance Jio, which is single-handedly responsible for the telecom price war, is yet to announce any such change. But since the other two telecom giants have already thrown in their towels, we believe that Jio will also make a similar announcement soon. That’s because Jio is currently India’s largest telecom service provider by market share, and it stands to gain a lot by raising its prepaid tariffs.
Update: Jio follows suit, announces up to 21% hike in prepaid tariffs
As expected, Jio has also jumped on the bandwagon. The telecom service provider has announced that it will raise prepaid tariffs by up to 21% starting December 1. The company has raised the pricing for its base ₹75 prepaid plan to ₹91, undercutting similar offerings from Vodafone Idea and Airtel by ₹9. Other plans from the carrier have also received a similar price bump, but they continue to be more affordable than similar plans from the other two telecom giants.
In a statement on the tariff hike, Jio said, “In line with its commitment to further strengthen a sustainable telecom industry, where every Indian is empowered with a true digital life, Jio today announced its new unlimited plans. These plans will provide the best value in the industry. Upholding the Jio promise of providing the best-quality service at the lowest price globally, Jio customers will continue to be the biggest beneficiaries.”
As mentioned earlier, Jio’s new prepaid tariff plans will go live on December 1, and will be available through all existing touchpoints and channels.