New Delhi: Bharti Airtel's decision to scrap select prepaid packs could lead to a hike in average revenue per user (ARPU) in a broad range of Rs 4-12, brokerages have estimated as the telco turned to targeted plan changes to drive premiumisation and monetisation.
Some viewed the changes as selective plan rationalisation rather than an across-the-board or formal tariff hike, but said it would aid Airtel's premiumisation strategy by prompting customers to upgrade.
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Recently, Bharti Airtel withdrew four prepaid plans -- Rs 299, Rs 579, Rs 619 and Rs 649 -- leaving subscribers of the popular Rs 299 plan with pricier options to choose from.
The reshuffled prepaid offering deck leaves the entry-level Rs 199 and Rs 219 plans unchanged, but it means that subscribers of the popular Rs 299 plan may now have to opt for the Rs 349 pack, translating into a price rise of about 16 per cent for them.
The brokerages - Morgan Stanley, IIFL Capital, JM Financial, and Citi - in their recent notes, have modelled different scenarios to estimate the potential expansion of Airtel's ARPU.
Between the four brokerages, Airtel's plan rationalisation is projected to drive monthly ARPU up in a broad range of Rs 4 to Rs 12, as discontinued entry-level packs nudge subscribers to up-trade into higher-value data plans.
Morgan Stanley estimated that assuming 20-30 per cent of Airtel's wireless subscribers were on plans below Rs 349 and are now pushed to upgrade to the Rs 349 offering, the changes could drive a gross ARPU increase of about Rs 8-12 at the company level.
The plan tweak is a focused attempt by Bharti Airtel toward higher monetisation while capitalising on customer preferences for higher data plans, it said, adding that Airtel has taken the first step toward changing the tariff architecture and it will be interesting to see when or if other operators follow suit.
Citi estimated an ARPU benefit of about Rs 4 per month based on certain assumptions around the subscriber mix on the Rs 299 pack. It said the move was consistent with Airtel management's strategy of driving ARPU growth through premiumisation.
JM Financial pegged the potential increase at Rs 5-6, or about 2 per cent, assuming 10 per cent of Airtel's subscribers upgrade to plans costing roughly Rs 50 more. It noted that the move was aimed at shifting subscribers to higher-data and higher-ARPU plans rather than constituting a broad tariff hike.
IIFL Capital estimated an annualised ARPU uplift of about Rs 12, although the FY27 benefit could be around Rs 4 as it already factors in broader tariff hikes later in 2026. It termed the changes an advancement of tariff hikes on select plans.
"We believe this is an advancement of the next round of tariff hikes (assumed in Dec'26) on select plans. For now, we are not assuming that this tariff tweak is over and above the Dec'26 expected tariff hike. The incremental benefit from the current move will thus be limited to four months of FY27, implying a potential FY27 ARPU uptick of Rs 4," IIFL Capital said in its note.
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