Vodafone to Offer 20 Rs Monthly Recharge Plan: Report

It is reported that Vodafone Idea is reducing the minimum amount of recharge per user, which is mandatory to keep the SIM card active. As per the reports on Internet, the minimum amount of recharge is reduced from Rs 35 to Rs 20, as the operator continues to try to consolidate its position in the market, despite a rapidly decreasing user base. Vodafone Idea introduced the minimum recharge amount for prepaid users to increase their average revenue per user (ARPU). Vodafone hopes to maintain its overall revenue and potentially reduce prices.

Interestingly, the minimum recharge of Rs 20 will offer users a validity of 28 days, while the previous minimum amount of Rs 35 offered users a validity period of 30 days. Even with the slightly reduced validity period, the new Vodafone Idea recharge amount will lead to significantly lower overhead annually. The move is a bit confusing since so far, Vodafone Idea has been emphasising keeping its minimum amount of recharge for users to reduce the burden of low-income users, which in turn is believed to lower gross margins of network revenue.

Vodafone Idea has faced massive stress due to the Reliance Jio influx and recently admitted that the market leads the latter. Since the advent of Jio, Vodafone Idea, along with Bharti Airtel, has been forced to reduce data and call prices, as well as to introduce value plans grouped into prepaid and postpaid networks. In spite of this, Vodafone Idea has seen one of the highest dropout rates in the entire Indian telecom industry. With the latest reduced price, Vodafone Idea will expect to stop the flow of unsubscribing users and hope to recover part of its lost market share in the coming years.