Multiple Recharge of Top-Ups Positive But low value data packs Negative

Wireless Indian Industry Trends from our recent circle-level retailer sampling and interactions with Operators indicate that tariff increases and smaller players restricting their footprints to fewer circles should add 150bps to QoQ revenue growth rate over normal seasonality.

The frequency of top-ups has been increasing. The mix also has been improving as upselling (to higher denomination vouchers) has
seen some success. In this round of tariff increase, no telco has played spoilsport until date.

When a telco raises headline tariffs by 20% (say from Rs1/min to Rs1.2/min), the immediate impact on usage could be up to 10%.
Over time, the customer gets used to higher rates especially if other telcos follow suit. Then usage returns to the earlier level.

5% revenue increase would happen if all subscribers moved to 20% higher tariff rates. Typically, the 20% increase in a single round is over only a small portion (say 10%) of its subscribers as TRAI’s six month lock-in period would leave the telco vulnerable to RMS loss if others do not follow.

Most customers specify an amount (typically under Rs50) for top-up without enquiring about tariffs or hunting for the cheapest plan. Some retailers were unaware of some of the recent yield increase measures by various telcos.

Some of the pain points mentioned by retailers include the cumbersome processing of customer acquisition forms post tighter
KYC norms, little business case in selling low-value data packs, clutter related to multiple telcos offering multiple plans, prevalent VAS-related mis-selling, and bill shocks on exceeding the data limit in 3G plans.