Growth of Postpaid accounts drive ARPU in emerging markets

Vodafone India, the country’s second largest telecom service provider, saw a 20% increase in the number of post-paid subscribers in 2013, ahead of it biggest competitor Airtel.

Vodafone India now has around 10 million post-paid subscribers – around 7% of its total subscriber base of 160 million. In comparison, Bharti Airtel, India’s largest telecom service provider, has 9.5 million post-paid users, around 5% of its total 190 million subscribers.

In 2011, 97% of Indian youth used pre-paid mobile connections. Today this figure is well below 90%.

The shift to postpaid has been attributed to increase in data consumption among young mobile customers who have greater control over data usage and spending on post paid. Most prepaid plans in India are aimed at consumers in smaller towns and rural areas where voice is still the main revenue generator.

As post paid adoption increases, industry ARPU has experienced a boost. The average revenue per user (ARPU), for both voice and data, is around INR 176. This is the highest ARPU in the last few years, according to industry body Cellular Operators Association of India.

Brands in emerging markets should focus on customer experience

As young customers in emerging markets move from prepaid plans to postpaid accounts, mobile brands need to focus more on delivering a better customer experience instead of cheap products to maintain increasing ARPU and lower churn rates.