Bharti Airtel Follows Suit: Increases Mobile Tariffs by 10-21% Post Jio's Move

Bharti Airtel announced a sharp hike in prepaid and postpaid mobile tariffs on Friday, following rival Reliance Jio increasing rates a day earlier. This is the first big revision of tariffs in the telecom sector in two and a half years.

The revised tariffs at Airtel will not be below 10% and will go up to 21%. For example, rates for the daily data add-on of 1GB would be increased from Rs 19 to Rs 22; 365-day validity pack with 2GB/day from Rs 2,999 to Rs 3,599, dearer by Rs 600.

The tariffs in the unlimited voice plan category will increase by Rs 179 to Rs 199 for a 28-day validity plan with 2GB data. While Airtel said its price hikes have been 'very measured', especially at the entry-level plans, so as to minimize impact on budget-conscious consumers – the average increase is less than 70 paise per day.

It further said that the Average Revenue Per User had to be more than Rs 300 for continuing heavy network investments of the last few years to have a reasonable return on capital. Days after rival Reliance Jio announced raising its tariffs, Airtel's decision has now set the ball rolling for Vodafone Idea to do something similar shortly, industry analysts said.

While these are increases, Airtel's plans are largely priced above that of Reliance Jio. The hikes have been across various plans, from daily data plans to long-term validity offerings, with as much as 20.8% in some instances.

Additionally, the company has asserted its conviction that there is a pressing need to get to a much more realistic and reasonable level of telecom tariffs in India vis-à-vis international benchmarks. It added that the latter should have a pricing model that will guarantee its survival at this level and ensure continuing investments in infrastructure or technology.