Entry level telecom tariffs have increased over 340 percent over the last three years. In December 2019, when a pre-paid user paid Rs 35 as the lowest tariff, he now has to pay a minimum of Rs 155.
Telecom major Bharti Airtel recently scrapped its entry level tariff plan of Rs 99 in most of its circles and hiked the same to Rs 155.
However, while entry level plans have seen a substantial increase, higher priced plans have seen only two tariff hikes between 20-25 percent each since December 2019.
Although the hike in entry level tariffs is a step in the right direction for Bharti Airtel, the impact of the same is not very material, as lower-end customers top-up less frequently.
Brokerage firm Morgan Stanley estimates Bharti Airtel's India mobile revenue to benefit by 1.3-1.5 percent as and when the entry level tariff hikes are implemented on a pan-India basis.
Bharti Airtel had first done away with the entry level plan of Rs 99 in Haryana and Odisha in November last year. Both circles combined to form nearly five percent of the company's overall subscribers.
Last month, the company extended this plan to another 15 circles, taking the total count to 17.
The three circles that are yet to see a price hike from the telecom operator are Kolkata, Gujarat and Madhya Pradesh.
There is also some churn where subscribers may switch to competition that offers a lower priced plan. A thing to note here is that Vodafone Idea has not raised tariffs, although it continues to lose subscribers.
Lower end customers also account for a lower proportion of the overall revenue, thereby keeping the impact minimal.
In a note on February 8, brokerage firm IIFL had also estimated the revenue accretion to be less than 2 percent.
Morgan Stanley said that a bigger trigger for Bharti Airtel going forward would be a 4G tariff hike, both for prepaid and postpaid.
Telecom major Bharti Airtel recently scrapped its entry level tariff plan of Rs 99 in most of its circles and hiked the same to Rs 155.
However, while entry level plans have seen a substantial increase, higher priced plans have seen only two tariff hikes between 20-25 percent each since December 2019.
Although the hike in entry level tariffs is a step in the right direction for Bharti Airtel, the impact of the same is not very material, as lower-end customers top-up less frequently.
Brokerage firm Morgan Stanley estimates Bharti Airtel's India mobile revenue to benefit by 1.3-1.5 percent as and when the entry level tariff hikes are implemented on a pan-India basis.
Bharti Airtel had first done away with the entry level plan of Rs 99 in Haryana and Odisha in November last year. Both circles combined to form nearly five percent of the company's overall subscribers.
Last month, the company extended this plan to another 15 circles, taking the total count to 17.
The three circles that are yet to see a price hike from the telecom operator are Kolkata, Gujarat and Madhya Pradesh.
There is also some churn where subscribers may switch to competition that offers a lower priced plan. A thing to note here is that Vodafone Idea has not raised tariffs, although it continues to lose subscribers.
Lower end customers also account for a lower proportion of the overall revenue, thereby keeping the impact minimal.
In a note on February 8, brokerage firm IIFL had also estimated the revenue accretion to be less than 2 percent.
Morgan Stanley said that a bigger trigger for Bharti Airtel going forward would be a 4G tariff hike, both for prepaid and postpaid.
First Published: Feb 21, 2023 11:35 AM IST
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