Bharti Airtel has stopped offering several prepaid plans, including the popular ₹299 pack, effectively pushing subscribers toward higher-priced options like the ₹349 plan. This strategic move aims to boost the company’s Average Revenue Per User (ARPU). Analysts expect this rationalization to lift monthly ARPU by ₹4 to ₹12, keeping the firm on track toward its long-term target of ₹300.
Bharti Airtel has recently discontinued a set of prepaid mobile plans, a move that forces existing subscribers to shift to more expensive packages. The company has removed plans priced at ₹299, ₹319, ₹579, ₹619, and ₹649 from its offerings. This is not a broad tariff hike but a targeted strategy of plan rationalization to nudge customers toward higher-value alternatives. For instance, a user previously on the ₹299 plan is now likely to choose the ₹349 option, marking an increase of roughly 16% in their monthly cost for that segment.
Strategic Push for ARPU
This strategy is part of a broader effort to improve monetization and achieve the company's long-term ARPU target of ₹300. In the first quarter of fiscal year 2027, the company reported an ARPU of ₹264. By limiting choices at lower price points, the operator aims to increase the amount spent per user, which is a key metric for profitability in the telecom sector. The entry-level plans at ₹199 and ₹219 remain unchanged, suggesting the company is focusing its monetization efforts on the mid-range segment.
Financial Impact and Estimates
Financial experts from firms like Morgan Stanley, Citi, and JM Financial have analyzed the potential impact of these changes. Their models suggest that if a sufficient portion of subscribers migrates to the ₹349 plan, the monthly ARPU could see an uplift of ₹4 to ₹12. Brokerages view this as a precursor to broader industry adjustments expected later in 2026, as the company seeks to generate more revenue from its existing user base without implementing a blanket price increase that might trigger widespread churn.
Risks and Market Monitorables
Investors should consider the potential risks involved in this approach. While it is designed to help margins, there is always a risk of customer resistance if users find the new, higher prices unattractive. If users decide to switch service providers, subscriber numbers could feel the pressure. Additionally, the success of this strategy depends heavily on whether competitors decide to match these pricing moves or if they keep their plans unchanged to attract users leaving Airtel. Investors should track future quarterly results to see if these shifts successfully move the ARPU closer to the ₹300 goal and how the subscriber base reacts to these changes over the coming months.