Home / Industry / Telecom /  Bharti Airtel hikes minimum recharge for prepaid users

New Delhi: Bharti Airtel Ltd has raised the minimum monthly recharge for prepaid users to 45 with immediate effect from Sunday, more than a year after it set this tariff at 35.

This means every Airtel prepaid user will have to pay a minimum of 10 more every month to stay on its network. “It will be mandatory to recharge with a voucher of 45 or above every 28 days to avail services," Airtel said in a notice on Sunday.

“In case of non-recharge with a voucher of 45 or above at the end of the tariff validity period, Airtel reserves the right to provide the plan benefits in a curtailed manner at its own discretion during the grace period of 15 days. In case of non-recharge of a voucher with 45 or above, all services will be suspended post the grace period," it said.

Prior to this 45 plan, consumers could get an additional 28-day validity through a recharge of 23 which included only incoming calls and messages.

Last month, Bharti Airtel and Vodafone Idea had raised tariffs by as much as 40%. The regulator too earlier this month kick-started a consultation process to determine if regulatory intervention is required in fixing tariffs and the need for a floor price for mobile services, which has come as a welcome relief for operators clamouring for tariff increase after waging a three-year battle with Reliance Jio Infocomm Ltd, which brought data prices to rock-bottom. However, a hike in minimum prepaid monthly recharge is significant as it hits users at the bottom of the pyramid.

In November 2018, Bharti Airtel had announced that it had set the minimum tariff at 35 and through this, the company would be able to reduce the number of inactive customers, rein in general selling and administrative expenses, and help focus attention on improving services for better-paying users.

The move to further hike the charge comes two months after it was hit by an unfavourable court verdict after a 14-year battle between telecom companies and the department of telecommunications on the definition of adjusted gross revenue (AGR) in the sector.

Bharti Airtel has set aside 34,260 crore and Vodafone Idea has made provisions for 25,677.9 crore in the September quarter after the Supreme Court upheld the government’s definition of revenue, based on which telecom companies pay levies. As a result, Bharti Airtel posted a massive loss, its highest and second quarterly loss in 14 years, amid a brutal price war unleashed by Reliance Jio that has reshaped the telecom market. The New Delhi-based Bharti Airtel swung to a 23,045 crore loss in the September quarter from a profit of 118 crore a year ago as it set aside money to pay the dues. Vodafone Idea’s loss for the September quarter widened to 50,922 crore from 4,874 crore in the year earlier.

At the Hindustan Times Leadership Summit earlier this month, Aditya Birla Group chairman Kumar Mangalam Birla had said that the group’s telecom unit, Vodafone Idea, will have to “shut shop" if there was no relief from the government following the apex court ruling on AGR.

Clarity is, however, awaited on the payment timeline and amount as Airtel and Vodafone Idea have filed a review petition on the court ruling.

As of September end, Airtel’s revenue from mobile services in India was 10,811 crore, up from 10,724 crore in the June quarter. It has 279.43 million users as of September end.

“This is another step in the right direction. Slowly raising rates is a decent strategy given that tariffs have been low for last three years and revenue streams have been under pressure. Consistent periodic revision in tariffs is expected now," a Mumbai based analyst said requesting anonymity.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout