Airtel scraps Rs 99 economy plan in favour of new Rs 155 plan

The most economical and inexpensive mobile plan of Bharti Airtel has been scrapped in 7 out of the 22 telecom circles. The telecom circles where these economy plans were discontinued include Andhra Pradesh, Bihar, Himachal Pradesh, Karnataka, the 7 Northeast sisters, Rajasthan and Uttar Pradesh. In a phased manner, Airtel also plans to scrap these economy plan in another 13 out of the remaining 15 circles.

This effectively means that the Rs 99 economy plan stands scrapped and is now replaced with the Rs 155, which will now be the base plan in the Airtel basket. As a result of this tweak, Bharti Airtel is likely to see an improvement in the Average Revenue Per Unit (ARPU) per month per customer. However, users will derive a number of other concomitant benefits from this new scheme, which is priced nearly 50% higher than the old economy scheme. 

Here is the key takeaway. The erstwhile Rs99 plan provided users with 200 MB of data, and calls at 2.50 paisa per second. By shifting to the new Rs 155 framework, Airtel users will get unlimited voice call plan with 1 GB of data; apart from 300 free SMS every month. The new plan proposed by Airtel is more flexible and convenient and it is also in sync with the new trend in telecom, where consumers are using a lot more data.

Airtel not only wants to cover the spectrum dues but also the cost of rolling out 5G across India. Hence, aggressive increase in the ARPU is inevitable. This will help Airtel to invest more in the 5G ecosystem and improve the quality of the service. Current ARPUs in the Indian telecom sector are among the lowest in the world and most telecom players have complained it is unviable. Tariff hikes could get steeper in the coming weeks and months.