Profit margin on mobile recharges

[korin]

Since Airtel Axis card offers 25% cashback on Airtel recharges and bill payments.
I'm guessing both Axis bank and Airtel would still be earning massive profits even after giving these cashbacks.

I'm wondering, how much actual profits does the telecom company make on the mobile recharges. What does a Rs. 100 recharge actually cost to the telecom company? Does anyone have any idea?

 

[akshayhs]

My guess is they have already made bank from all these years. They have been one of India's longest MNOs. Given Jio's rise, and AirTel's comfortable survival, getting new customers is just a bonus. Their postpaid base is huge and not everyone will be able to pay on time. So added late fees is one way to make money. I'm sure they're losing on cashbacks but it's not hurting their wallet yet. Also not everyone will use unlimited calling to its fullest extent as well. So prepaid is 50:50 gane for them.

 

[thanix]

Since Airtel Axis card offers 25% cashback on Airtel recharges and bill payments.
I'm guessing both Axis bank and Airtel would still be earning massive profits even after giving these cashbacks.

I'm wondering, how much actual profits does the telecom company make on the mobile recharges. What does a Rs. 100 recharge actually cost to the telecom company? Does anyone have any idea?

No idea about profit on Rs.100 recharge but telecoms measure Average Revenue Per User (ARPU) as industry wide metric. As the name states it is the average revenue from a single subscriber. Airtel is closer to 190 and their aim is to get to 200 after the price war with Jio. Their minimum recharge for 28 days is now 150 Rs I think. They are still adding subscribers more by porting but there is very less scope for higher profitability in near future despite 5G. Hence there is not much interest in Airtel stock in the market.

I am not sure about Airtel Axis cashback but I believe it is a very minimal blip in the overall margin for Airtel and Axis.

 

[SiddharthR]

I think 25% cb will last longer, but the 10% cb won't.