Airtel's subscriber additions plunge as Jio gains, despite ARPU growth

Bharti Airtel’s mainstay India mobile services business clocked 4% sequential growth in Ebitda to ₹18,874 crore in the September quarter (Q2FY27). The business contributed nearly 83% of its Ebitda from Indian operations, excluding Indus Towers. Growth was mainly driven by a 2.7% QoQ increase in mobile average revenue per user (Arpu) to ₹271.

But improved Arpu alone might not impress investors. That’s because Airtel has reintroduced its popular ₹299 prepaid data plan, which comes with 28 days of validity. The plan was significant as it offered a relatively low-cost entry point for users with a daily data limit of 1GB. After scrapping the plan on 12 August, Airtel’s cheapest entry-level plan was the ₹349 plan, offering 1.5GB of data per day.

But instead of matching Airtel's earlier tariff move, rival Reliance Jio chose to keep the price of its entry-level plan at ₹299. Separately, it also announced a Jio Prime scheme with a one-time cost of ₹300 for twelve months, effectively ₹25 per month, offering protection against tariff hikes for a year.

What did this mean for both companies? Airtel’s net mobile subscriber additions plunged from 3.3 million in Q1FY27 to 0.7 million in Q2FY27. On the other hand, the corresponding numbers for Jio rose from 7.3 million to 7.7 million. Jio's mobile subscriber additions exclude home broadband additions but include machine-to-machine or Internet of Things SIM card additions. While factors such as network coverage and quality could explain the divergence between the two rivals, Airtel’s tariff tweak is likely to have played a role in shaping the trends.

Airtel’s move may have hurt mobile subscriber additions, but the impact of the reintroduced ₹299 plan on its Arpu might not be too negative sequentially in Q3, for several reasons. Q2’s Arpu improvement was mainly driven by factors such as an additional day in the quarter and a higher number of postpaid subscribers. Since the tariff tweak in prepaid plans was effective only for part of Q2, its impact on Arpu was limited. Also, Airtel has raised tariffs across all its postpaid plans by ₹50 per month from 8 October, with the minimum plan price increasing from ₹449 to ₹499. This should support Arpu even if postpaid mobile subscribers continue to account for a small share of its subscriber base, at 8.3% at the end of September.

Airtel’s home broadband segment saw customer additions grow 4.7% QoQ to 15.36 million homes by the end of September. While home broadband growth prospects are upbeat, the management said during the Q2 earnings call that it was scaling back fixed wireless access (FWA)-led expansion. However, deploying fibre-to-the-home (FTTH) connections could take longer, which could affect near-term growth in home broadband customer additions.

For the Indian telecom business, Airtel reports Ebit (earnings before interest and tax). Its market capitalization (net of its stake in Africa telecom, Indus Towers after applying 20% holding company discount)-to-Ebit based on annualized H1FY27 financials is around 24x, almost at 10% discount to Jio-based on same parameter.

The Airtel stock has been flattish in 2026. Jio Platforms’ listing brings a “clean play on Indian telecom service” unlike Bharti that has passive infrastructure business (Indus Towers), lending business, Africa business, so further near term re-rating for Bharti is difficult.