Summary:
Airtel has discontinued its ₹299 prepaid plan, pushing daily-data users to the ₹349 pack and effectively raising the minimum monthly spend by 16.7%. The move is aimed at improving ARPU and monetising Airtel’s 5G investments. Airtel’s India mobile ARPU rose to ₹264 in Q1FY27, while data usage continued to grow. If Jio and Vodafone Idea follow with similar plan withdrawals, the telecom sector could see further ARPU growth without a formal tariff hike.
Bharti Airtel has started another round of prepaid tariff rationalisation by discontinuing its entry-level ₹299 plan, effectively raising the minimum monthly spend for subscribers seeking daily data. Customers who previously paid ₹299 for 1 GB of daily data over 28 days will now need to move to the ₹349 plan, translating into a 16.7% increase in minimum spend. Airtel has also reportedly withdrawn its ₹319, ₹579, ₹619 and ₹649 prepaid plans as it simplifies its tariff structure and pushes customers towards higher-value packs.
The ₹349 plan provides 1.5 GB of data per day for 28 days along with unlimited 5G access, meaning the change is not a conventional like-for-like tariff hike. However, subscribers wanting daily data must now spend at least ₹50 more, making it an effective tariff increase for customers at the lower end.
Airtel Targets Higher ARPU and Better 5G Monetisation
The move comes as Airtel continues to focus on increasing average revenue per user, or ARPU, and improving returns on its substantial network investments. Airtel's India mobile ARPU reached ₹264 in Q1FY27, up 2.7% from ₹257 in Q4FY26 and 5.6% from ₹250 a year earlier. Its India mobile customer base stood at 376.5 million, up 3.8% year-on-year, while mobile data usage increased 27.7% to 34.4 GB per customer per month.
Airtel has previously indicated that ARPU needs to move towards ₹300 initially and ultimately around ₹350 to support sustainable returns on network investments. Market estimates suggest the latest plan rationalisation alone could potentially add around ₹4 per month to ARPU if customer migration occurs without significant churn.
Will Reliance Jio and Vodafone Idea Follow?
Competitive response will now be important. Reliance Jio currently offers a ₹299 plan with 1.5 GB daily data for 28 days, while Vodafone Idea's ₹299 offering provides 1 GB daily data for 28 days. If these plans remain unchanged, price-sensitive Airtel customers could consider switching operators. Historically, however, tariff actions by one large operator have often been followed by competitors. In July 2024, industry-wide tariff revisions ranged from roughly 12%-25%.
Jio ended June with more than 533 million subscribers, including 285 million 5G users. Its ARPU stood at ₹215.6, up from ₹214 sequentially and ₹208.8 a year earlier, implying annual growth of around 3.3% without a fresh tariff increase during the past year.
Vodafone Idea's ARPU increased 1.7% sequentially to ₹177 from ₹174, while its subscriber base stood at 193.1 million. Compared with ₹165 a year earlier, ARPU has increased around 7.3%.
If Jio and Vodafone Idea withdraw similar low-cost packs, the sector could see another leg of ARPU expansion without announcing a formal across-the-board tariff hike.
