India’s largest telecom operator reported an increment of over 18% in its Average Revenue Per User (ARPU). The ARPU rose from ₹104 Q3FY18 to ₹123 Q4FY19. The jump in the ARPU is witnessed amidst the company’s decision to introduce a minimum recharge scheme.
The scheme was adopted by Bharti Airtel to get rid of low ARPU customers.

The arrival of Reliance Jio heavily disrupted the telecom industry. The company entered the market in September 2016 with offers which nobody had offered in the industry before. The company provided free voice calls along with 4G internet services in its initial stages. This helped them to capture customer base quickly by impacting margins of other companies like Airtel, Idea, Vodafone, etc. Several other operators had to file for bankruptcy and shut down.

The paring of low ARPU customers

After losing a major portion of the customer base to Jio, Airtel introduced a minimum recharge scheme. The scheme required users to pay ₹35 every month to continue availing their services. This step was adopted to eliminate users with lower ARPU. These customers contributed a small part in their profits against the huge investments incurred to cater to these users.

After losing their customer base, Airtel opted to focus on customers with higher ARPU. This will not only reduce the investments for the company but also improves the ARPU for the company. However, the company has lost its second position to Reliance Jio in terms of the subscription base. Vodafone-Idea is leading in terms of the subscription base.

Bharti Airtel’s Q4FY19 performance

Bharti Airtel reported their performance for the period of Q4FY19, the revenue stood ₹20,602 crore which rose 6.6 % compared to ₹19,634 crore in Q4FY18.
The net profits of the company amounted to ₹107 crore vs 83 crores for Q4FY18. The company reported a profit despite the anticipated heavy loss.

In March 2019, Vodafone-Idea leads in terms of subscriber market share dominating with 33.98%. Bharti Airtel stands second securing 27.99% market share; Whereas Reliance Jio accounts for 26.40%

The ARPU of Airtel jumped over 18% to ₹123 from ₹104 from the previous quarter. However, for Q4FY19, the ARPU of Vodafone-Idea soared 18% to 104, whereas the ARPU for Jio plummeted 4.5% to ₹126. However, the ARPU remains to be the highest in the industry for Jio.

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