Whalesbook
India's Telecom Pricing Called 'Broken,' Capping Revenue
Bharti Airtel is warning that India's current telecom pricing structure is unsustainable. Executives expressed dissatisfaction with the mere ₹3 increase in Average Revenue Per User (ARPU) last quarter. This slow growth is attributed to a flawed pricing model that limits revenue, especially as unlimited data plans in India yield less than higher-priced options common in markets like Europe and the U.S.
Airtel Proposes Tiered Plans to Drive Upgrades
To address this, Airtel is proposing a shift towards a usage-based, tiered pricing system. This model would offer different data allowances—small, medium, large, and extra-large—creating a natural incentive for customers to upgrade as their data consumption increases. CEO Shashwat Sharma explained this structure aims to unlock a "natural pathway for customer upgrades based on their actual consumption."
Boosting ARPU Through Upgrades and 5G
To lift ARPU, Airtel plans to push key growth drivers. This includes significantly increasing its base of post-paid customers and encouraging users to upgrade plans as their data needs grow. The company sees strong potential in higher-tier post-paid plans, alongside revenue growth from 5G adoption, increased international roaming, and customers upgrading from feature phones. Significant investments are also being made in fibre-based broadband services, with increased capital expenditure on fibre infrastructure to deliver a premium customer experience.
Network Readiness and Diversification
Sharma confirmed Airtel's 5G network is now fully Standalone (SA) ready. Beyond core network enhancements, the company is investing in future-proofing through new areas identified via "calibrated experiments." These ventures include data centers, financial services, and Airtel Cloud, signaling strategic expansion into diverse growth sectors.