Bharti Airtel's Tariff Hike Strategy: Path to Exceeding 200 ARPU

In the vast and ever-evolving telecom landscape of India, leading players like Bharti Airtel are continually strategizing their moves. To understand how Bharti Airtel plans to tackle the next tariff hike and what it anticipates from it, one need not venture into any Ivy League. Instead, let's look at the current telecom ecosystem in India.

India's Telecom Landscape: Limited Competition

India, currently, boasts of only two major players in the telecom sector: Bharti Airtel and Vodafone Idea (VI). While Vi has been facing significant challenges and is not projected to rehabilitate its position in the immediate future, the market almost feels like a duopoly. Customers thus have limited options, and companies can anticipate an increase in customer demand due to a lack of alternatives.

Current Tariffs and Their Impact

India stands out when it comes to telecom tariffs. The average cost per gigabyte (GB) of data in India is just 0.68, significantly lower than the global average of 4.21. This makes India one of the most affordable markets for mobile internet, despite the average revenue per user (ARPU) being relatively low compared to other developed nations.

The story of data pricing evolution is also quite interesting. Over the past few years, the cost of data plans has increased by about 7.5 times, with a reported price of 0.09 per GB recorded in late 2020. However, even with this notable rise, the prices remain lower than the global average, indicating that the consumer is still enjoying a more affordable data plan.

Anticipating Future Tariff Hikes

With this background in mind, Bharti Airtel can be expected to implement more aggressive pricing strategies in the near future. Given the current dynamics, a strong case can be made for tariff hikes. Such hikes, though often met with resistance from subscribers, are necessary to sustain the company’s operations and future growth.

Industry experts predict that the average monthly data plan cost in India may soon touch INR 250 to 300 for a 30-day plan with a cap on the data limit. Currently, there are already plans in the INR 220 range, indicating a steady increase that may continue in the coming months.

Bharti Airtel's Strategic Goals

Beyond the immediate financial considerations, Bharti Airtel is on a mission to significantly increase its average revenue per user (ARPU). The company has set its sights on the 200 INR ARPU mark, which is a considerable improvement from the current average.

To achieve this goal, Bharti Airtel may consider several strategies, including:

Enhancing the quality of services to justify higher tariffs. Moving towards value-added services and premium tariffs to cater to a higher-paying user base. Expanding its reach into underserved regions to increase its customer base. Incorporating more innovative pricing models that cater to different consumer needs and segments.

Conclusion

As the landscape of Indian telecom continues to evolve, with Bharti Airtel leading the charge, the upcoming tariff hikes present both challenges and opportunities. While the strategy may face resistance from existing customers, it is a necessary step towards achieving greater financial stability and growth for the company.