While telecom operators are deliberating the exact pricing strategy for 5G services, a top executive at Bharti Airtel told businessline that telecom tariffs should evolve into a differential pricing scheme wherein high-paying subscribers will get substantially superior and distinct services. This is being done to improve the average revenue per user because under the existing tariff schemes users capable of paying more are still on a low price plan because the services being offered are similar.
The executive said Airtel will release its tariff plans for 5G in the next few days. “The decision on whether we will price 5G services at a premium will have to be balanced with ensuring that enough uptick of 5G also takes place,” the executive said. With limited penetration of 5G-enabled handset, adoption of 5G plans, even at a premium, it is unlikely to boost ARPUs for Airtel, the executive said. Therefore, there is a need to shift to a pricing model that will help operators get a higher wallet share through value-added services.
This comes even as Jio has indicated that it will maintain its strategy of lower prices for 5G initially to drive usage.
5G rollout
According to the Airtel executive, 5G services will be made available in 15 cities by December, 50-60 major cities by March 2023, and most urban areas will be covered by March 2024. After this, Airtel will commence rural expansion.
While 5G services have been officially launched on October 1, users complained that they were not able to access the service despite having 5G-capable handsets. Sources said major handset makers such as Samsung, Xiaomi, and Apple are likely to make a software upgrade later this month that will help address the issue
The executive also indicated that Airtel will utilise re-farmed 4G mid-band spectrum to eventually deploy a standalone 5G network. He noted that for the initial deployment of 5G services a non-standalone network will serve Airtel’s subscriber base well. “The ecosystem and demand for network slicing for enterprise purposes will take a few years to manifest; by then Airtel should be able to use refarmed 4G spectrum,” said the executive.
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Published on October 3, 2022
