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Airtel withdraws discounts on data packs for pre-paid customers

Service Centre in Jaipur--airtel-service-centre-in-jaipur

India’s largest telecom operator Airtel has withdrawn discounts it offered on online purchases of its mobile data for pre-paid customer packs and has brought it on par with internet packs sold through offline retailers, reports the Press Trust of India.

For example,  Mobiletor.com points out that in the Mumbai circle, customers could buy 1GB of 3G data for Rs 249 and it had a validity period of 30 days. This has been cut down to 1GB of mobile Internet for 28 days only and customers need to pay a higher price of Rs 255. In 2G data packs, customers can now get Rs 199 pack which gives  1.25GB for 28 days, as opposed to 2GB of 2G data for 30 days.

“There is a slight change in few of our online prepaid data packs owing to the discontinuation of discounted offers on these,” an Airtel spokesperson told MediaNama.

It’s worth noting that last week, Idea Cellular has increased its mobile data prices by up to 100% for some of its pre-paid 2G plans in Delhi-NCR, while data prices for its 3G plans have gone by around 33%.

With this, it is expected that other telecom operators will be increasing their tariffs considering that the fact that total bids during the spectrum auctions earlier this year were 37% higher than the reserve price. A Vodafone spokesperson told MediaNama that the company is evaluating a response to Airtel and Idea’s hikes. We’ve also written to Idea Cellular and will update once we get a response.

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Data connections and revenue

The withdrawal of discounts come even as Airtel reported a total 19.44 million 3G Mobile Internet connections for the quarter ended March 31, 2015, registering a 14.7% growth sequentially. The total mobile Internet base saw a 9.8% increase to 46.39 million connections, from 42.25 million connections in the previous quarter. It also reported average data revenue per user growth of 3.5% to Rs 176, from Rs 170 in the previous quarter.  Mobile Internet revenues for Airtel in India, grew by 69.4% YoY to Rs 2320.98 crore for the quarter.

On spectrum auctions

During a recent conference call, Airtel CFO Srikanth Balachandran stressed on how cash generation will be the only sustained way for investments in the sector.

“At this stage one must take stock of the economic realities of the telecom sector. Since 2010 operators have sunk $50 billion just on spectrum. As Internet penetration moves up month-on-month, operators are also continuously investing in network. Hence, revenue development accompanied by cash generation is the only way forward for sustained investments in the sector, which we believe can be sustained by top players thereby further consolidating market in favor of top players. In the auctions Airtel not only renewed its spectrum but also acquired more across bands to augment voice and data delivery,” Balachandran said.

In the 2015 spectrum auctions, Airtel won a total spectrum of 111.6 MHz for Rs 29,130.2 crore. It won 900 MHz spectrum in Andhra Pradesh, Assam, Bihar, North East, Himachal Pradesh, Karnataka, Odisha, Punjab, Rajasthan, and West Bengal circles.  In 1800 MHz, won spectrum in 6 circles: Andhra Pradesh, Haryana, Kolkata, North East, Odisha and Punjab. In 2100 MHz, won spectrum in 7 circles: Gujarat, Haryana, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu and Uttar Pradesh (East).

 

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