When Reliance Jio entered the telecom sector and introduced free services, followed by low priced prepaid plans, other telcos like Airtel, Vodafone and Idea also implemented different strategies and started offering discounts on their services. However, this resulted in low revenue and even lowered profits for the companies and now, Airtel and Vodafone Idea are implementing a new policy to increase revenue generation, which could cost them some of their consumers. We previously reported that the two telecom operators are imposing a minimum recharge restriction of Rs 35 on their prepaid customers and turning their lifetime SIM connections to one with a limited validity. We can now confirm that the telcos are implementing a minimum recharge amount on their users with a prepaid connection. As per Airtel, their users will need to recharge with a minimum of Rs 35 to keep their connection active. If a user fails to do so, their connection will be barred from making calls and if a minimum recharge is not made in 15 days, incoming calls will also be barred on their connection. However, the remaining balance left on their SIM, if any, will still remain and the telco will deduct Rs 30 every three months to not deactivate the connection. There is a grace period of 90 days before a SIM card is deactivated by the telco and a user can recharge with a minimum of Rs 35 anytime to re-activate it. Moreover, a report also suggests that prepaid users may soon have to pay for incoming calls. This will force prepaid users to recharge every month in order to at least receive calls, if not make them. We contacted COAI, Airtel and Vodafone to validate the authenticity of this report. While COAI and Vodafone declined to comment on the subject, an Airtel spokesperson said that this mandate was already declared and publicized by the telco and reiterated in the company’s recent earnings call. Airtel also provided a transcript of the said earnings call, where Gopal Vittal, Airtel India’s Managing Director and Chief Executive Officer, spoke on the topic. In the transcript, Vittal said that even though there are about 330 million customers on the company’s network, there are around 100 million customers with extremely low average revenue (APPU). Additionally, he also reiterated the changes made by the company and introduction of packs with raised ARPU, with the minimum ARPU starting at Rs 35. Vittal stated, “This is something that we have seen some good results in and we are now rolling this out across the country. In fact, in the last seven days, we have already rolled out across the country, so if you see tariffs now there are brutally simplified seven or eight tariffs. With minimum ARPU plans starting at Rs.35. So that is on one side of the market, which is at the lower end.” This move by the telcos basically ensures they that a user spends at least Rs 35 every month on recharge. This will bring in more revenue for the telcos from users who don’t perform any recharge and maintain a minimum amount so that their connections are not deactivated. This is quite common since if one uses an Airtel or Vodafone Idea SIM as a secondary mobile connection, chances are they are recharging with less than Rs 35 per month on an average. This second connection is generally used only for incoming calls and a base recharge of Rs 10 would ensure that the connection stayed active for the validity of the recharge.
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