Airtel may shed up to 70 m users as it insists on minimum balance

Bharti Airtel will lose 50-70 million customers as it ends its ‘lifetime free incoming’ plan and asks customers to maintain a minimum balance of ₹35.

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.

“I think we may shed a few customers — 50 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?” the executive said.

How will Airtel acquire new customers? Customers moving from feature phones to 4G smartphones present an opportunity.

There is also scope for increasing the ARPU by giving better and more services, more content with partnerships and so on,” he said.

The company in October decided to do away with its lifetime free incoming calls plan for prepaid customers, as they did not spend anything for outgoing either.

It replaced some of its prepaid tariff plans with ‘minimum ARPU’ plans and asked existing users of the previous plans to make a recharge of at least ₹35 per month to continue using Airtel services.

TRAI directive

Vodafone-Idea similarly replaced its existing ‘free’ plans with ‘limited validity’ plans. As customer complaints rose, the Telecom Regulatory Authority of India (TRAI) directed the telcos to inform subscribers in a clear and transparent manner about the changes. But the telcos are legally entitled to withdraw any tariff plan that is older than six months.

The ARPUs of Airtel, Idea and Vodafone had dropped drastically after Reliance Jio entered the fray in 2016 with highly competitive tariffs. As of the September quarter, Airtel and Vodafone-Idea’s ARPU stood at ₹100 and ₹88 respectively, while that of RJIo was ₹131.

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