Airtel Terminates “Lifetime Free Incoming” Plan, Risks Losing Customers

Bharti Airtel Limited is an Indian international company providing telecommunications services, the company is based in New Delhi, India. It has branches in 20 counties across Africa and South Asia. Airtel provides a wide range of services including 3G, 4G, voice services and fixed-line broadband.

In the past, customers using prepaid SIM cards can receive incoming calls for life without having to recharge their accounts. However, according to a report published by Hindu Business Line, Airtel will lose a major proportion of its customers’ base, between 50 to 70 million customers after deciding to terminate the lifetime free incoming feature for prepaid connections. The telecom major will also require prepaid customers to maintain at least Rs 35 to keep their connections active.

A senior executive of Airtel stated to the press that the company was not worried about the number of lost customers because this move will produce higher average income per user (or ARPU) considering that many SIM cards issued under the lifetime free incoming calls plan were not utilized. The executive also pointed out that some of the expected number of lost customers – 50 million to 70 million – are not existent or maybe second SIM cards. Therefore it is unreasonable for the company to bear that burden.

In response to the question from reporters about Airtel’s plan to attract new customers, the senior executive stated that by offering better services and more content with partners, the company can use the shift of customers from feature phones to 4G smartphones as an opportunity to raise ARPU.

Airtel decided to terminate the lifetime free incoming calls plan in October after an analysis by the company revealed that the plan was not profitable for them because customers weren’t paying for outgoing calls either. The report also indicates that Airtel, Vodafone, and Idea all went through a significant drop in ARPUs after Reliance Jio entered the market in 2016. In the third quarter of 2018, Reliance Jio’s ARPU was Rs. 131 compared to Rs. 100 and Rs. 88 of Airtel and Vodafone respectively.

Vodafone and Idea have also made similar moves to Airtel as they ended their lifetime free plans and introduced “limited validity” plans. Vodafone customers are no longer able to receive incoming calls if they don’t recharge their prepaid connections after a month. As many consumers are enraged, the Telecom Regulatory Authority of India instructed the telecom companies to clearly and transparently announce the recent changes to customers instead of immediately disconnect customers’ connections.