Airtel's Strategic Pricing Shift: The Future of Telecom Tariffs

Bharti Airtel plans a strategic shift in its pricing structure to transition users to higher-tier plans over time, according to CEO Gopal Vittal. Despite recent tariff hikes, the company hasn't seen the expected user downgrade or SIM consolidation. Airtel's ARPU and mobile data consumption increased significantly year-on-year.

Bharti Airtel is considering a strategic shift in its pricing structure to encourage users to transition to higher-tier plans gradually. The announcement was made by the company's CEO Gopal Vittal during the earnings call on Tuesday, highlighting the potential to increase tariffs over time while assisting customers in moving from lower to medium and higher-level plans.

Vittal noted that post-tariff hike, the company hasn't observed the anticipated SIM consolidation or a reduction in user activity. Contrary to expectations, Airtel has maintained its user base while upgrading customers' plans. The company's mobile ARPU saw a notable increase, rising to Rs 233 from Rs 203 year-on-year, with a 22.6% rise in mobile data consumption.

Despite the positive financials, Airtel, along with Jio and Vodafone Idea, experienced a subscriber loss following the tariff rise, losing over 16 lakh subscribers in July. Looking ahead, Airtel plans to prioritize investments in 5G and fixed wireless access networks, discontinuing further investment in 4G infrastructure as it aims to drive growth in ARPU through segments like international roaming and prepaid-to-postpaid transitions.

(With inputs from agencies.)