Vodafone Idea and Bharti Airtel are switching off low Average Realisation Per User (APRU) subscribers, reports the Financial Express.
ARPU users are those who spend Rs 35 per month from their network connections, meaning around 25 crore 2G users will soon lose their mobile connections. Out of the 25 crore to be laid off, Bharti Airtel has roughly around 10 crore users in the below Rs 35 a month bracket, while, Vodafone Idea comprise the rest 15 crore users.
Both Airtel and Vodafone Idea have various plans starting at Rs 35. While Airtel has seven pan-India plans from Rs 35, Vodafone has five plans with the lowest recharge of Rs 35 a month.
The 25 crore subscribers who use dual sim phones, use the lower recharge connections for incoming calls only. The idea behind the move to Rs 35 is to increase revenue.
The APRU of the users is Rs 10. If Bharti Airtel’s minimum recharge each month remains the same, their monthly income from the bracket is Rs 100 crore. However, a move to Rs 35 plan will see higher profits. Even if half remain on the network and move to the new plan, the revenue accrued in a month will be Rs 175 crore.
The companies also want to switch the low paying 2G users onto 4G. The other option for operators is to challenge Jio’s Rs 500 feature phone, which is an expensive proposition. Otherwise operators can focus on only high paying customers, thus improving their ARPUS by shifting them to 4G bundled plans.
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