Airtel was recently surpassed by its chief competitor Jio in terms of user base. While Airtel and Vodafone Idea continued to lose users, Reliance Jio added almost as many users its rivals lost in the month of May. One of the biggest reasons for Jio's growth is its competitive prepaid plans, especially the high-speed data packages. Now, Airtel might just lose to Jio's competition if Sunil Mittal's statements are any indication.
Airtel chairman Sunil Mittal hinted at tariff hikes, where users could end up paying ten times more than they are currently paying.
"You either consume 1.6GB of capacity per month either at this price point or you may prepare to pay a lot more. We don't want $50-60 (roughly Rs 3,700 Rs 4,400) like the US or Europe but certainly $2 (roughly Rs 160) for 16GB a month is not sustainable," Mittal said at the book launch of his colleague Akhil Gupta.
Rs 100 for 1GB; would you pay?
Deciphering Mittal's calculations show Airtel customers might end up paying Rs 100 per GB as compared to Rs 10, which users are currently paying. For instance, Airtel is offering its users a package of Rs 199, which gives 1GB data per day for 24 days, which is a total of 24GB. If Mittal has his way, users could get 2.4GB data for the entire period for the same price. It's like 2014 all over again.
Mittal further added that the average revenue per user (ARPU) should be at Rs 300 per month for the business to be sustainable.
"We need a Rs. 300 ARPU in which you will still have lower end at Rs. 100 a month with decent amount of data. But if your consumption is largely around watching TV, movies, entertainment and depriving other vital special services networks, then you need to pay for that," Mittal said.
