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Bharati Airtel makes a comeback after bruising tariff war
Launch of Wynk tube,e-book app and minimum recharge plans have helped Bharti Airtel.
After a tough competition with Jio, rival Bharti Airtel Ltd has maintained its number one position in telco, with its customer retention and engagement strategy driving up data usage and monthly revenue.
This has raised hopes in a sector which has seen margins squeezed and revenues eroded due to Jio's launch of dirt cheap data tariffs in 2016 September. That forced operators to either shut down, get acquired or merge businesses, leaving just two other private players in the battlefield: Airtel and the merged entity of Vodafone India and Idea Cellular.
In the last six months, Airtel has introduced a slew of measures to take on Jio. It began with rolling out monthly minimum recharge plans beginning at ₹35 to get rid of inactive users, which helped in improving its average revenue per user (ARPU).
To keep the customers' engaged on the network, it launched Wynk Tube, an extension of its music streaming service Wynk Music, keeping in mind the small-town users that allow streaming both audio and video within the same interface. It also started an e-book mobile application, Airtel Books, as a subscription service for niche users. To retain its prepaid customers, who make up over 90% of its total user base, it has also started a loyalty programme where you are benefitted based on the size of the tariff plan.
Requesting anonymity a Mumbai-based analyst told, "Bharti is showing courage. Look at how the minimum recharge plans worked and improved its average revenue per user. It seems like it does not fear that Jio will cut prices. The better news is wherever Airtel is taking the lead in raising tariffs, Vodafone Idea is also following."
Airtel's ARPU for the March quarter was ₹123, an 18.6% rise from ₹104 in the December quarter. Whereas Jio's ARPU for the March quarter is just ₹3 higher than Airtel's at ₹126.2. Vodafone Idea falls behind these two at ₹104.
Airtel's data consumption per user in the March quarter was 11 GB per month, for the first time beating Jio, it saw usage of 10.9 GB per month in the same period.
Its strategy of users consuming more data on its network is expected to improve ARPU and customer engagement, two metrics which are already showing good signs of progress.
During the January-March quarter, Vodafone Idea lost 53.2 million users whereas Jio added 26.6 million. Airtel lost only 1.5 million users but managed to improve revenue.
"If you look over a long period of time, prices are not coming down anymore. So competitive intensity is stable because we're not seeing any further fall in pricing," Bharti Airtel CEO Gopal Vittal said in a post-earnings call with analysts on Friday. "But it is still a brutal marketplace in terms of pricing structure… and industry repair has to happen".
