Telecom Diary: Will a tariff raise revive Vodafone Idea?

In a bold move, Airtel and Vodafone Idea revised prepaid mobile tariffs by 20-25% which may help them to improve their average revenue per user (ARPU). But will this tariff hike revive the fortunes of Vodafone Idea which has been struggling to raise funds for a year now?

The hike in prepaid mobile tariffs will help Vodafone Idea in closing planned $3.4 billion fundraising, which the company aims to conclude by end-FY22.

Airtel said it expects ARPU at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model. ARPU is a key metric for a telecom player’s profitability.