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G. Rambabu

NEW DELHI, June 4

THE efforts by the Bharti group to hold its ground against competition from Bharat Sanchar Nigam Ltd and the limited mobility operators seem to be finally paying dividends.

The slew of tariff plans for the "new" customers of AirTel that the company announced over the past one month has managed to bring the bounce back in its subscriber growth.

According to senior company officials, the average net additions which were in the range of 1.2 lakh from January to April this year had now breached the two-lakh mark. The customers who had been adopting a "wait-and-watch" attitude after the launch of limited mobility services by Reliance have now taken the plunge. Buoyed by this response, Bharti has now set an internal target of five lakh new subscribers per month.

The officials noted that the first four months of the current year had been a particularly bad for the private cellular operators, mainly because of uncertainty in the market. This is now been taken care of by the steep fall in cellular tariffs.

Companies have gone all out to woo the new subscribers and have been offering attractive rates making them comparable to the rates of WLL services and even BSNL's cellular services. The "AirTel 012" plan is one such tariff structure introduced last month that has knocked the wind out of competition and brought the crowds back to Bharti, they said.

As per the plan, in addition to the proposition of free incoming calls from anywhere, anytime, mobile-to-mobile (M2M), outgoing local call has been priced at just Re 1 per minute, while M2M national long-distance calls have been priced at Rs 2 per minute. These are all inclusive composite rates. All this is for a net monthly charge of Rs 299. What's more, the customer does not have to give any entry deposit for making mobile-to-mobile STD calls.

The officials noted while the response in the initial few weeks had been encouraging, this had had also a tremendous revenue impact on Bharti.

An interesting development is that the post-paid to pre-paid ratio is slowly altering. While until recently, close to eighty per cent of Bharti's cellular subscribers have been pre-paid customers, the announcement of the new tariff plans have seen people clamouring for the post-paid variants. At this rate, the ratio of post-paid subscribers could be increasing soon, which is good news in terms of average revenue per user (ARPU).

While the average ARPU of post-paid customers of Bharti has been in the region of Rs 1,550, for pre-paid customers it is only Rs 360. In other words, it may take as many as four pre-paid customers to generate the revenues of one post-paid customer.

The shift in the profile base of customers was therefore a welcome development for the company, the officials noted.

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