According to Jefferies, Bharti Airtel’s recent decision to jack up base prepaid rates by a whopping 57 per cent in 19 markets is estimated to immediately boost its average revenue per user (ARPU) by 3 per cent to Rs 199. The analyst firm estimates Airtel to see 13 per cent growth in its mobile ARPU over FY’2023-25, driven by a combination of market share gains among 4G subscribers, hikes in voice tariffs and an improving tariff outlook in the sector, especially after the government recently converted Vodafone Idea Limited’s (Vi’s) debt into equity and became a 33.1 per cent stakeholder in the telco.
As per Jefferies, with another 107 million voice subscribers on its network yet to upgrade to data, Airtel’s ARPUs will likely rise by 4-5 per cent annually due to the improvement in subscriber mix. Besides, Jefferies is of the opinion that while government support could potentially help Vi secure incremental funding, it’s unlikely to match Airtel or Reliance Jio’s capital expenditure (capex) plans of $9/25 billion over the next three years.
