Telcos to switch off 25 cr users

​New Delhi: Vodafone-Idea and Bharti Airtel have reportedly decided to switch off the connection of subscribers with low Average Realisation Per User (ARPU). This is said to be because such users generate ARPU of around Rs 10, which reportedly generates about Rs 100 crore in monthly revenue for Airtel. If this was raised to Rs 35, the overall monthly revenue will go up to Rs 175 crores.  This means that around 25 core 2G connections might soon be switched off if their users don’t go for these higher priced plans. 

From these connections, Airtel is said to have about 10 crore users that spend lower than Rs 35 per month, while around 15 crore Vodafone-Idea subscribers are said to fall under the same category. The telcos have reportedly scrapped their older plans that were below the ARPU and both, Vodafone-Idea and Airtel, have released 5 and 7 plans starting at Rs 35 per month, respectively, and these packs are available pan India. 

“We have about 33 crore customers in wireless, but if you look at the pattern of consumption across the base you will find that there is a very large number of customers, some of whom we acquired from Telenor and some that we have ourselves, about 10 crore customers with very low levels of ARPU. So, these ARPUs are sort of low double-digit,” Gopal Vittal, Bharti Airtel CEO and managing director was quoted saying. Vodafone-Idea CEO Balesh Sharma was quoted saying, “It was a substantial number that were using it either only for incoming or had got ARPUs below that of the average or that of unlimited customers. 

The ARPU of non-unlimited is about a fourth of the ARPU of the customers who take the unlimited plan. Therefore, everybody who goes up the chain is an upside, even within the non-unlimited, because now he or she is paying a rupee in the Rs 35 a month package, so that is an upside versus those who were not paying us even a rupee, unless many of them choose instead to go to unlimited package which is also very good for us because then there is an ARPU that increases there.” Sharma didn’t share the total number of subscribers falling in Vodafone’s low ARPU category.