Airtel brings back ₹299 plan on churn concerns

In a surprise reversal, Bharti Airtel Ltd. has brought back its ₹299 entry-level prepaid plan, just months after having scrapped it in a bid to get customers to spend more. The move comes after the telecom operator saw a sharp slowdown in subscriber additions and a higher customer churn in the September quarter (Q2), underscoring the challenge of raising tariffs in India's price-sensitive mobile market when rivals stay put.

The ₹299 plan is now back on the company website. There was no immediate response to Mint's emailed queries to Bharti Airtel on the development.

Airtel had in August withdrawn its ₹299 plan that offered 1 gigabyte (GB) data a day, leaving customers with a ₹349 option as the next cheapest, effecting a 16.7% increase in their monthly spending. This plan comes with 1.5GB of daily data and unlimited 5G access.

The scrapping of the entry-level plan appears to have come at a cost. The mobile operator added just 716,000 subscribers in the September quarter that ,took its wireless base to 377.2 million. For context, the addition was a tiny fraction of the 3.3 million figure seen in the preceding three months.

“The churn we saw in Q2 is largely a combination of two things: seasonality in Q2, and the prepaid intervention we took, which always has a temporary impact on customer continuity,” Shashwat Sharma, managing director and chief executive officer (CEO), Airtel India, said during a post earnings call with analysts on Friday.

In postpaid, Airtel added 1.2 million users, taking the total to 31.2 million. The company said its focus on strengthening its portfolio proposition led to exceptional performance in the segment.

Including FTTH (fibre-to-the-home), machine-to-machine and wireline connections, the operator's total customer base in the country rose to 498.7 million from 491.9 million in the previous quarter.

Reliance Jio, which is the market leader by subscriber base, and third private player Vodafone Idea had not followed Airtel in removing their entry-level plans, as they focussed on market share expansion. Jio added a net 9.1 million subscribers over the quarter, taking its total to 542.4 million.
On Friday, shares of Bharti Airtel ended 2.5% higher at ₹2,107.2 on the National Stock Exchange, while the benchmark Nifty 50 rose 2%.

Bharti Airtel, however, has been successful in maintaining its lead over Jio with regard to average revenue per user (Arpu), a key metric of monthly revenue earned from each mobile customer.

“On Arpu, we continue to see significant headroom from the levers we have spoken about: upgrades of plans, postpaid, international roaming and top-ups,” Sharma said. “The intervention we took on the prepaid ladder in Q2 has already played out. We are now looking at all the other levers to continue growing Arpu steadily over the coming quarters, and I see sustained Arpu growth as we continue to unlock them”.

In the September quarter, Airtel’s Arpu rose 2.7% sequentially and 6% from a year ago to ₹271. The growth outpaced that of rival Reliance Jio, whose Arpu rose 1.5% sequentially and 3.5% from a year ago to ₹218.8 in the September quarter.

“By bringing back the entry-level tariff plan, Airtel could now be looking at balancing the volume and value-led growth. The elasticity is always high at the entry-level or lower tier market, which will definitely port out if another operator is offering a cheaper plan,” said Faisal Kawoosa, chief analyst at Techarc.

According to Kawoosa, this rollback also shows that tariff hikes can sustain if operators take cue; as likely in Airtel's case, it will always hurt the one who takes the lead and if the competition does not follow.

In March, Bharti Enterprises chairman Sunil Bharti Mittal had said “an Arpu of ₹350 would be the most appropriate Arpu in today's timeframe to have a sustainable, solid, financially viable telecom company.”

He had added that the company will keep the low-end entry points affordable for all its customers, given India is a price-sensitive market. However, at the mid- to upper-end, Airtel believes there is scope for upselling and restructuring its data packs.

At the analyst call, asked about India's tariff architecture, Sharma said “when we speak about pricing architecture in the industry, it is largely about the fact that it is a very flat architecture. At a very low Arpu, you are giving away unlimited usage and data, and you are not monetizing consumption in any way. Changing that will require the industry to move more decisively. So, the intervention in August was more an experiment on our own base, to keep moving Arpu up.”

He said that the architecture correction is a much broader correction that the industry needs to make—to charge for data.

To be sure, Airtel's decision to bring back its entry-level plan also assumes significance at a time when rising smartphone prices owing to higher component costs have increased the cost of entry-level devices.

"We have seen some softness in customer upgrades. Entry-level smartphone prices have gone up substantially and shipments have slowed. However, one other thing we are seeing is that in India there is a very strong refurbished phones market which is expanding, which is supporting the smartphone upgrades at the entry level," Sharma said.

Higher spending by customers and a stronger Africa business helped Bharti Airtel beat revenue and operating profit estimates in the September quarter.

Consolidated revenue from operations rose 16.7% year-on-year and 4% sequentially to ₹60,878 crore. Net profit increased 31% from a year ago and 8.8% from the previous quarter to ₹8,887.5 crore, missing the consensus estimate of ₹9,293 crore.

Jatin is based in New Delhi and writes on telecom and technology with a keen interest in policy and regulation. With over five years of reporting experience across Informist Media, Financial Express and now Mint, he has extensively covered the telecom, information technology, electronics and semiconductor sectors.<br><br>A commerce graduate, Jatin's work focuses on tracking industry developments, regulatory changes and policy decisions that shape India’s evolving digital ecosystem. Over the years, he has reported on key trends and shifts across these sectors, bringing clarity to complex policy and business issues.<br><br>Known for his strong news sense, Jatin focuses on breaking stories and delivering in-depth reporting that offers readers an understanding of complex topics, policy decisions and corporate developments. His work often examines the intersection of policy and business, highlighting how regulatory decisions impact industry strategy, pricing, and consumer outcomes.<br><br>He brings a strong domain understanding for Mint and his work is widely picked up by other media firms. With a focus on accuracy and depth, he aims to break down developments into clear, accessible insights for readers, while continuing to track emerging trends shaping the future of India’s telecom and technology sectors.

Rudrani Chattopadhyay is a Mumbai-based journalist. At Mint, she covers the creator economy and education, with a particular interest in the smaller trends taking shape across digital media. She believes every trend has a story behind it and likes digging into the people, ideas and shifts that sit beneath what is immediately visible. Before joining Mint, she worked at The Statesman in Kolkata, where she started as an intern before working as a sub-editor on the print news desk. She holds a master’s degree in Media Science and a bachelor’s degree in Journalism from the University of Calcutta. Rudrani keeps too many tabs open in her mind, is a raging maximalist and has a soft spot for historical fiction and feminist literature. She is happiest when in the company of coffee.

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