In July 2021, Airtel was the first telecom company to raise tariffs after the Jio led bloodbath over the last 4-5 years. It had then raised tariffs for the post paid customers. The raise was significant and for some enterprise customers it was as high as 50%.
Now Airtel has again taken the lead and increased tariffs for prepaid customers by as high as 25%.
Airtel said higher tariffs will help boost its mobile average revenue per user (ARPU), a key yardstick to measure profitability of telcos, to “ Rs 200 and ultimately at Rs 300 so as to provide a reasonable return on capital that allows for a financially healthy business model.”
Following Airtel’s price hike, everyone is expecting Vodafone Idea as well as Jio to follow suit and raise the tariffs.
Better financial performance is much needed for the debt laden industry to spend on upgrading the network and also roll out the 5G network.