Airtel & Vodafone Idea raise prepaid tariffs in India by up to 25%

Calling and mobile data tariffs in India dropped significantly after Reliance Jio entered the telecom sector in 2016. Since then, the three biggest players in the industry — Reliance Jio, Vodafone Idea, and Bharti Airtel — have tried to one-up each other by offering cheaper plans to attract more subscribers. Although that has been great for consumers, the price war hasn’t worked out well for two of the three carriers. As a result, Airtel and Vodafone Idea are now raising the prepaid tariffs by up to 25 percent.

According to a recent Mint report, Bharti Airtel on Monday raised its entry-level voice tariff plan by about 25 percent to ₹99 and increased tariffs for most unlimited voice bundles by 20 percent. With this change, Airtel aims to increase its average revenue per user (ARPU) to ₹200 and eventually to ₹300 “to provide a reasonable return on capital that allows for a financially healthy business model.” Airtels updated tariff plans will go into effect on November 26.

Vodafone Idea soon followed suit and said it would also raise tariffs by up to 25 percent to improve its ARPU. According to ET Telecom, Vodafone Idea is also increasing the price of its entry-level prepaid plan by 25 percent from November 25. The new plan will cost ₹99 and offer users ₹99 worth of talk time, 200MB data, and 1p/sec voice tariff. The price hike will “start the process of ARPU improvement and help address the financial stress faced by the industry,” Vodafone Idea said in a statement.

Reliance Jio, which is single-handedly responsible for the telecom price war, is yet to announce any such change. But since the other two telecom giants have already thrown in their towels, we believe that Jio will also make a similar announcement soon. That’s because Jio is currently India’s largest telecom service provider by market share, and it stands to gain a lot by raising its prepaid tariffs.

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