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Bharti Airtel nearly doubles its minimum recharge plan

Airtel has increased its minimum recharge validity plan of Rs 23 to Rs 45, a 95% increase.

ET Bureau|
Last Updated: Dec 30, 2019, 02.56 PM IST
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Mumbai: Bharti Airtel has increased its minimum recharge validity plan of Rs 23 to Rs 45, a 95% increase, a sign that the telco is not shying away from raising tariffs across spectrum to improve its revenue earned from customers and aim for healthier balance sheets.

In a public notice on Sunday , the second largest telco announced that the new base price will be effective from December 29.

This means that Airtel’s customers have to recharge for at least Rs 45 instead of Rs 23 for a validity period of 28 days and therefore the customers will have to shell out at least Rs 22 more per month .

“...in case of non recharge with a voucher of Rs 45 or above , at the end of the tariff validity period , Airtel reserves the right to provide the plan benefit in a curtailed manner at its own discretion during the grace period of up to 15 days . Incase of non-recharge with a voucher of Rs 45 or above , all services will be suspended post the grace period ,” said the company in its public notice .

Airtel’s move also comes at a time when the sector regulator has opened a consultation process on whether to set floor tariffs for voice and data services, which would again lead to raised prices and improvement in health of sector under a debt of over Rs 7 lakh crore .

Now all eyes are on Vodafone Idea , which continues to have a base recharge pack of around Rs 23 , but is expected to revise it as well . Vodafone Idea did not respond to ET’s queries.

Rival Reliance Jio Infocomm’s minimum recharge plan starts at Rs 98 and Rs 75 for its smartphone and Jiophone customers respectively .

A higher minimum recharge will weed away more customers who are not helping in getting higher revenues or moving up the tariff plan.

Average revenue per user (ARPU)-a key industry metric , determines the health of the telco and as of September end Airtel’s ARPU is at Rs 128.

The latest change comes after Airtel and its rivals increased their tariffs early December for the first time since 2016.

The new price plans came in beginning of December and are expected to push their ARPUs higher .

Analysts expect Vodafone Idea’s ARPU to rise to Rs 143 from Rs 107 and Airtel’s to Rs 145-150 from Rs 128 over the next two quarters. Jio’s ARPU could increase to over Rs 140 by the fourth quarter of FY20. The three-year-old telco’s ARPU was Rs 120 in the September quarter.

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