MediaNama’s Take:
Major telcos Airtel and Vodafone Idea (Vi) have been talking about tariff repair for a long time now. It seems that there is agreement between the two companies that higher-income customers need to pay more for services than lower-income ones. In its earnings call for the quarter ending December 2024, Vi had mentioned a usage-based pricing approach where overall charges for heavy data users can be higher, while per GB pricing is lower. Meanwhile, Airtel has expressed concern that the entry-level plans today provide the average user with so much data that they do not have any incentive to move to a higher plan.
Vi’s emphasis on heavy data users paying more, combined with Airtel’s critique of overly generous entry-level plans, suggests agreement for tiered data pricing based on consumption patterns and more restricted entry-level offerings that encourage upgrades. While this may make business sense, it could be complicated to ensure industry-wide implementation. In the previous attempt at tariff repairs, the government-run telco BSNL had not increased its prices, which at least temporarily led to subscriber migration. As such, any move from the private sector side to implement industry-wide changes may need explicit regulatory support.
What’s The News?
The architecture of pricing in India needs to change to improve average revenue per user (ARPU) in the telecom sector, Airtel’s Managing Director, Gopal Vittal, mentioned during its earnings call for the quarter ending June 2025 (Q1FY26).
“The architecture of pricing in India is quite skewed, where at the entry level itself or just above the entry level, you get so much of data allowance, you get so much of calling and messaging that you really don’t have any reason to upgrade. If there was a more sensible architecture like you’ve got, for example, in Indonesia, then we would already be sitting at an ARPU that is substantially higher than where India is today without any pain to customers at the low end,” he mentioned.
Vittal believes that the company has room for growth in its ARPU, because penetration of international roaming and postpaid is currently low. “So the headroom for our tool continues to be there, and it’s a function of how well we are able to persuade and execute users to actually move into some of these areas,” he added.
Capital expense on the new businesses:
On August 4, Airtel had announced the launch of its cloud service which comes with other business offerings. When asked what the capital expenditure for these segments will look like over time, Vittal explained that the company has already made investments in the service.
“We’ve now got two regions [storage capacity for the business] running and that are live, one in Delhi and the other in Chennai. We will open up a third region at some point in time. But as of now, there are two regions running. And this has enough headroom for us to…
Source link
Disclaimer
We strive to uphold the highest ethical standards in all of our reporting and coverage. We blogs.grocliq.com want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
Website Upgradation is going on for any glitch kindly connect at [email protected]
