Bharti Airtel and Vodafone-Idea have decded to switch off the connection of its subscribers with low Average Realisation Per User (ARPU).
It is said so because these users generate nearly Rs 10 ARPU,that inturn generates about Rs 100 crores in monthly revenue for Airtel.
If the same was raised to Rs 35, then the overall monthly revenue would go up tp Rs. 175 crores said the reports.
This inturn means that there is a possibility that nearly 250 million 2G connections might be switched off if the users don’t opt for these higher priced plans.
From these connections, Airtel is said to have about 100 million users that spend lower than Rs 35 per month, while around 150 million VodafoneIdea subscribers are said to fall under the same category.
The telcos have reportedly scrapped their older plans that were below the ARPU and both, Vodafone Idea and Airtel, have released 5 and 7 plans starting at Rs 35 per month respectively and these packs are available pan India.
“We have about 330 million customers in wireless, but if you look at the pattern of consumption across the base you will find that there is a very large number of customers, some of whom we acquired from Telenor and some that we have ourselves, about 100 million customers with very low levels of ARPU. So, these Arpus are sort of low double-digit,” said the CEO and the Managing Director of Bharti Airtel, Gopal Vittal,
The CEO of Vodafone Idea, Balesh Sharma said, “ It was a substantial number that were using it either only for incoming or had got Arpus below that of the average or that of unlimited customers. The Arpu of non-unlimited is about a fourth of the Arpu of the customers who take the unlimited plan. Therefore, everybody who goes up the chain is an upside, even within the non-unlimited, because now he or she is paying a rupee in the Rs 35 a month package, so that is an upside versus those who were not paying us even a rupee, unless many of them choose instead to go to unlimited package which is also very good for us because then there is an Arpu that increases there.”
The users those use Vodafone Idea SIM or Airtel as the secondary mobile connection happen to recharge with less than Rs. 35 per month.
The second connection is used for the incoming calls and the base recharge is of Rs 10 would ensure that the connection stayed active for the validity of the recharge.
If at all the above plan is practiced then the subscribers must either move to higher priced plans i.e. Rs 35 per month or else switch to their primary SIM operator.