Bharti Airtel has implemented significant changes to its prepaid tariff structure across India, discontinuing several plans, including its popular entry-level daily data limit plan priced at Rs 299 for 28 days with 1GB data per day. This strategic move, effective recently, is aimed at driving organic average revenue per user (ARPU) growth through selective premiumisation.
With the removal of the Rs 299 plan, the Rs 349 plan, which offers 1.5GB data per day for 28 days, has effectively become the company’s new entry-level unlimited data offering. This represents a 17% increase at that tier, according to an analysis by Motilal Oswal Financial Services (MOFSL).
Driving ARPU Growth Through Premiumisation
MOFSL noted that these latest changes are designed to boost ARPU, aligning with Bharti Airtel's stated focus on premiumisation. However, the brokerage also warned that this intervention might signal a further delay in a broader, industry-wide tariff increase, which MOFSL had previously anticipated for the December quarter.
The actual impact of these pricing adjustments on ARPU will largely depend on whether key competitors, Reliance Jio and Vodafone Idea, replicate Bharti Airtel’s strategy. Additionally, the share of data users previously on the discontinued Rs 299 plan will influence the overall flow-through to ARPU. MOFSL recalled that telecom operators, including Jio, had previously rationalised the entry-level Rs 249 plan in August 2025, yielding mixed results across companies.
Prima facie, MOFSL believes that these targeted tariff interventions could potentially drive up Bharti Airtel's blended ARPU by 6-7% over the medium term. This growth is expected through better monetisation from prepaid data subscribers, who constitute approximately 73% of Bharti's user base and account for 75% of its revenue mix.
Beyond the Rs 299 plan, Bharti Airtel has also discontinued other prepaid plans, including those priced at Rs 319, Rs 579, Rs 619, and Rs 649. The removal of these plans effectively positions Bharti Airtel's entry-level unlimited data plan at Rs 349, maintaining a Rs 50 per cycle premium over Jio’s Rs 299 entry plan.
Analyst Outlook and Future Implications
Given Bharti Airtel’s unlimited 5G data offerings starting from Rs 349 and an average data consumption of 34.4GB per month, MOFSL suggests that the share of users on the Rs 299 plan would likely have decreased over recent quarters. The number of users on other discontinued plans was also likely insignificant, potentially limiting the immediate upside to ARPU.
Based on MOFSL’s calculations, Bharti Airtel’s ARPU from prepaid data subscribers stood at Rs 275 in 1QFY27, an organic increase from about Rs 259 in 3QFY25. The latest pricing revision has removed ARPU-dilutive tariff plans for this cohort, raising the minimum ARPU from daily data limit plans for 28 days to Rs 321. ARPU for longer-validity daily data plans now ranges from Rs 254 to Rs 316.
These pricing changes could elevate MOFSL's estimated prepaid data subscriber ARPU for Bharti Airtel from Rs 275 to Rs 300, implying approximately 9% growth for that segment and organic blended ARPU upgrades of 6-7% over the medium term. Bharti Airtel has consistently highlighted premiumisation as a key near-term driver of ARPU growth, with tariff structure changes serving as a vital lever for sustainable ARPU growth in the medium term.
MOFSL concluded that this latest step may help prevent near-term earnings downgrades, even as the industry continues to await a broader correction in pricing architecture. The brokerage highlighted that a Rs 10 per month change in ARPU translates to an approximate Rs 34 billion (2.5%) change in Bharti Airtel’s consolidated EBITDA and about Rs 75 per share (3.2%) change in its target price. MOFSL has maintained its 'Buy' rating on Bharti Airtel, with a target price of Rs 2,335.
Overall, Bharti Airtel’s prepaid pricing adjustments represent a move towards selective premiumisation and medium-term ARPU growth, though the full impact will depend significantly on competitor actions and user migration patterns. A broad-based tariff hike, however, may now be further delayed than initially expected.