Airtel is facing a rapid decline in its average revenue per user (ARPU) due to a large number of inactive connections.
Bharti Airtel will lose 60-70 million customers as it ends its ‘lifetime free incoming’ plan and asks customers to maintain a minimum balance of ₹35 in order to continue using its services. The new move will help the company increase its ARPU over time. However, it is reported that the move would initially bring a loss of 60-70 million subscribers.
The company said it is not worried about the loss and, in fact, the step will generate more average revenue per user (ARPU) as many of the SIMs acquired under that plan were not being used, a senior executive told BusinessLine on condition of anonymity.
A senior executive said that “I think we may shed a few customers — 60 million to 70 million — as some of them may not exist at all or these could be second SIMs. That’s ok… why carry the burden?”
Airtel announced the change in October because the company analyzed that lifetime free incoming calls plan for prepaid customers do not bring anything for them as consumers aren’t paying for outgoing either. As per report, the ARPUs of Airtel, Idea and Vodafone dropped drastically after Reliance Jio‘s entry in 2016.
The ARPU of Airtel and Vodafone Idea as of the September quarter stood at Rs. 100 and Rs. 88, respectively. However, Reliance Jio, with its competitive recharge options and massive data offers, gained with an ARPU of Rs. 131 as of the same quarter.