Telecom operator Airtel has recently moved to a new prepaid recharge mechanism where subscribers are required to pay a minimum amount - Rs 35 - every month, failing which they will be booted out of its network.
The move is likely to boost Average Revenue Per User (ARPU) of Indias second-largest telco and aims to let go of low-value subsribers who are using its network largely for incoming calls without making enough monetary commitments. Strengthening of ARPUs is important for Airtel at this juncture when its top line and bottom line have been under pressure.
Airtel is sort of following Reliance Jio's path of a similar strategy for its prepaid customers. In India, prepaid subscribers account for 95.86 per cent of the market, as per TRAI data. It's likely to result in some correction in subsriber numbers for Airtel but the upside seems to outweigh this.