By Malvika Gurung
Investing.com -- The cash-strapped telecom service provider Vodafone Idea (NS: VODA ) has announced on Tuesday that it will increase its prepaid tariffs by 20-25% starting November 25, 2021, to increase its average revenue per user (ARPU) and address the financial stress faced by the industry.
Starting November 25, the telco’s entry-level prepaid plan of Rs 79 for 28 days, will be hiked by 25% and priced at Rs 99 for the same features, while all the remaining 11 unlimited voice bundles of Vodafone Idea’s prepaid plans will be hiked by 20%.
Besides, the company’s four top-up tariffs will also witness a price hike of 19-21% from November 25. Analysts believe that the much-needed tariff hike by telcos in the industry would boost their ARPUs for driving revenue growth, amid increasing competition.
For a loss-making telco like Vodafone Idea, hiking tariffs would support its initiative to increase ARPU from Rs 109 reported for the September-ending quarter, which would further improve its revenue leading to a better financial health so that it can invest in expanding its 4G network to better compete with rival telcos, Reliance (NS: RELI ) Jio and Bharti Airtel (NS: BRTI ).
Vi is the second telco to have hiked its prepaid tariff to drive ARPU, after Bharti Airtel announced raising its prepaid tariffs by 20-25% starting November 26, on Monday.
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