In a bold move, Airtel and Vodafone Idea have revised prepaid mobile rates from 20% to 25%, which could help them improve their average revenue per user (ARPU). But will this price increase revive the fortune of Vodafone Idea, which has struggled for a year to raise funds?

The rise in prepaid mobile tariffs will help Vodafone Idea close the planned $ 3.4 billion fundraiser, which the company aims to close by the end of fiscal 22.

Airtel has stated that it expects an ARPU of Rs 200 and ultimately Rs 300, in order to provide a reasonable return on capital which enables a financially sound business model. ARPU is a key indicator of the profitability of a telecommunications player.

Vodafone Idea’s latest prepaid rate hikes may increase revenue by around 10%, while entry rate hikes can further increase revenue by around 7% assuming there is no churn. or decline in data subscribers, analysts say. It has 137 million data subscribers, including 116 million on 4G networks out of a total of 254 million subscribers.

However, Vi’s cash flow crisis will be resolved provided that the current churn rate of subscribers is stopped with Rs 80-100 billion in estimated annual capital and interest expenses.

Vi’s immediate financial crisis has already been averted following the four-year moratorium on government spectrum and AGR payments (adjusted gross income). It has the option of converting interest on government contributions to equity by January 12, 2022, while the conversion of principal will occur at the end of the four-year moratorium period and at the discretion of the government.

However, the movement of tariff increases can increase the churn rate of subscribers.

Jio has yet to follow suit by increasing tariffs. The last tariff increase took place in December 2019 by Airtel, Vi and Jio who had increased the sector’s ARPU by around 15% to Rs 155-160 during the next fiscal year.

Airtel and Vodafone made their biggest hikes in the basic 2G package, which would make telecom service less affordable. On the other hand, the category of super discounted unlimited 4G data plans has seen its prices increase relatively less. Analysts expect the number of subscribers to decline in the coming quarters due to the reduced accessibility of basic 2G plans and the consolidation of SIM cards due to the general increase in tariffs.

Vodafone Idea’s base plan has now increased to Rs 99, forcing consumers to top up to higher plans, providing a huge boost to ARPU. “However, this may result in further consolidation of dual SIM cards, thereby increasing the churn rate,” Motilal Oswal said.

Start 5G trials

Vi on Friday showcased 5G use cases such as public safety, smart and connected health, smart construction and connected workers with its equipment partners Ericsson and Nokia, in Pune and Gandhinagar. He showcased 5G powered applications such as enhanced mobile broadband (eMBB), ultra-reliable low latency communications (uRLLC), multi-access edge computing (MEC), virtual and augmented reality ( VR / AR), among others.

Vi and Nokia recently reported achieving top speeds of over 1.5 Gbps on 3.5 GHz, over 4.2 Gbps on 26 GHz and up to 9.8 Gbps on spectrum binding bands E.

On Thursday, Airtel announced that it had conducted India’s first 5G trial on the 700 MHz band in autonomous mode (SA) with Finnish telecommunications equipment maker Nokia, on the outskirts of Calcutta. They achieved 40 kilometers of high-speed wireless broadband network coverage between two 5G sites under real-world conditions. Previously, Airtel had conducted the country’s first 5G rural trial with Nokia rival Ericsson on the outskirts of Delhi / NCR using the mid-band (3.5 GHz) test spectrum and existing FDD spectrum.

Airtel and Vi have both entered into partnerships with industry players to test various 5G use cases using the 5G test spectrum allocated by the Department of Telecommunications (DoT).

In September of this year, the three operators – Reliance Jio, Airtel and Vodafone Idea requested a one-year extension, until November 2022, to conduct 5G trials citing the lack of preparedness of ecosystem partners.

Telecommunications Minister Ashwini Vaishnaw recently said the government intends to hold 5G auctions from April to May 2022. The telecommunications regulator is currently consulting on the auction.

The Telecommunications Department has allocated waves in the 700 MHz, 3.5 GHz and 26 GHz bands to Reliance Jio, Airtel, Vodafone Idea and the state-owned company Mahanagar Telephone Nigam Limited (MTNL) to develop use cases locally relevant for next generation wireless broadband technology. .

5Gi is currently being evaluated by the Telecommunication Engineering Center (TEC) of India for commercial adoption in India.

Red Flag for Elon Musk’s Starlink

On Friday evening, the Department of Telecommunications (DoT) said that Starlink, owned by Elon Musk, was unlicensed, and issued a public notice not to subscribe to Starlink services as advertised, and added that he had asked the US company to refrain from booking satellite internet services with immediate effect.

The government has requested the company to comply with the Indian regulatory framework for the provision of satellite communication services and to refrain from reserving / rendering satellite internet services in India with immediate effect.

In March of this year, the American company Starlink began a pre-booking of satellite broadband services, which it planned to launch next year in India, based on constellations in low Earth orbit (LEO). Starlink’s rival OneWeb, backed by Sunil Mittal, the chairman of Bharti Enterprises, is planning a launch in India next year.

Musk’s SpaceX has accepted pre-orders for the beta of the service for a fully refundable deposit of $ 99 (around Rs 7,400).


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