Airtel’s 5% mobile customers use postpaid connections but contribute 20% revenue towards overall mobile revenues. Vodafone Idea, on the other hand, has 7% customers who use postpaid and contribute 25% revenue towards overall mobile revenues. Jio’s postpaid base is miniscule as compared to legacy telcos, as per industry analysts.
Airtel had last hiked postpaid tariffs for its corporate customers in July and had also made some adjustments to its family plan.
For retail customers, the Sunil Mittal-led telco discontinued its 749 family postpaid plan for new customers and will now offer Rs 999 as the only family postpaid plan with enhanced data benefits.
Vodafone India had previously hiked the postpaid tariff for two high-end plans by Rs 50. Its family packs worth Rs 598 and Rs 749 now cost Rs 649 and Rs 799, respectively. Jio’s plan starts from Rs 199 and goes up to Rs 1499.
“I think I will be surprised if postpaid rates are not increased, such tariffs will see a hike. Why would they delay it for too long? It’s not in their interest to delay it for too long. If they delay it longer, they only harm themselves,” Sanjay Kapoor, technology, media and telecom (TMT) adviser, was quoted as saying by Financial Express.
Kapoor, former Airtel CEO, said he expected Airtel and Vodafone Idea to have increased postpaid prices alongside prepaid tariffs since both telcos have a ‘fortified postpaid base’, something where Jio isn’t well-positioned.
Airtel has hiked its prepaid plan prices by 25%, effective November 26. Vodafone Idea and Jio followed suit, announcing hikes in a similar range, which are in effect now.
Analysts quoted by the financial daily believe price increase in the postpaid segment is in the offing now. “The increase is inevitable as India is still the lowest tariff country in the world and with the increase on prepaid, postpaid is likely to follow suit,” Prashant Singhal, emerging markets technology, media & entertainment and telecommunications (TMT) leader, EY, told the newspaper.
Both telcos — Airtel and Vodafone Idea — have publically expressed their intent to reach an average revenue per user (ARPU) of Rs 300 in the future, to remain sustainable in the market and invest in 5G.
Currently, financially ailing Vodafone Idea has the lowest ARPU of Rs 109 while Airtel leads with an ARPU of Rs 153, followed by Jio at Rs 143.6.