Bharti Airtel's Prepaid Plan Restructuring Could Lift ARPU by 2%, Says JM Financial
Key Takeaways
- •Bharti Airtel withdrew four entry-level prepaid plans, including the Rs 299 pack, requiring affected subscribers to shift to a Rs 349 alternative that costs approximately 16% more.
- •JM Financial estimates the plan consolidation will boost Airtel's ARPU by around 2%, as the discontinued plans represent only a specific segment of its subscriber base.
- •The Rs 199 and Rs 219 prepaid plans remain available at their existing prices and are unaffected by the changes.
- •Airtel's management has set an ARPU target of Rs 300 as a benchmark for achieving sustainable returns on capital invested in its network.
- •The move continues a broader Indian telecom industry trend of tariff rationalization that began with a sector-wide price hike in July 2024 by Airtel, Reliance Jio, and Vodafone Idea.
Bharti Airtel could see its Average Revenue Per User (ARPU) rise by approximately 2% after withdrawing four entry-level prepaid plans, including the popular Rs 299 pack, according to an analysis by JM Financial.
The discontinued plans required affected subscribers to migrate to the Rs 349 alternative, representing a price increase of roughly 16%. The Rs 199 and Rs 219 prepaid plans remain available at their existing prices without any changes.
According to the report, the tariff adjustment is expected to have a modest but meaningful impact on Bharti Airtel's overall ARPU, a key financial metric in the telecom industry that measures the average revenue generated per subscriber. The 2% projected increase reflects the fact that the affected plans represent a specific segment of Airtel's total subscriber base. Airtel's management has previously identified an ARPU of Rs 300 as a benchmark for sustainable returns on capital, and entry-level plan consolidation has been one of the mechanisms the operator has used to close that gap.
India's telecom sector has been undergoing a period of tariff rationalization, with operators consolidating their entry-level offerings to improve revenue quality. The move follows a broader industry-wide tariff hike in July 2024, when Airtel, Reliance Jio, and Vodafone Idea each raised prepaid and postpaid rates. The withdrawal of the Rs 299 plan and three other entry-level options continues this trend of nudging subscribers toward higher-value plans, a strategy that carries particular weight in India's three-player private telecom market where operators face substantial capital expenditure commitments for 5G network expansion.
Related coverage from Economic Times previously reported that Airtel's move effectively raises tariffs by 3–4% on affected plans. A separate ET Telecom report noted that subscribers on the Rs 299 plan face a 16% price increase as the operator withdraws the four entry-level options.
Source: Economic Times Markets
