Bharti Airtel has removed its Rs 299 prepaid plan, along with three other plans, effectively pushing a large chunk of its prepaid customers towards higher-priced packs as it looks to lift average revenue per user (Arpu) without raising headline tariffs.
The company has discontinued the Rs 299, Rs 579, Rs 619 and Rs 649 plans. With the Rs 199 plan remaining available, customers now move directly to Rs 349, followed by the Rs 399 plan. The Rs 299 plan offered 1.5 GB of data a day for 28 days, while the Rs 349 plan offers 2 GB a day for the same validity.
This means customers who want to retain a similar entry-level position will have to pay Rs 50 more a month. The removal of higher price point plans like Rs 579, Rs 619, and Rs 649 plans won’t affect the company in any manner because there’s hardly any volume for them.
The change could have a sizeable impact on Airtel’s revenue mix as the Rs 299 plan is estimated to account for around 80% of its prepaid users. Even a partial migration of these customers to the Rs 399 plan could provide a significant lift to Arpu. Some users could also migrate to competing operators, but the move would reduce Airtel’s exposure to lower-paying subscribers.
The restructuring comes at a time when Airtel is already pursuing premiumisation across its customer base. The company added 1 million postpaid customers in the June quarter, its highest-ever quarterly addition, while mobile Arpu rose to Rs 264 from Rs 257 in the March quarter.
Airtel’s 4G/5G customer base also expanded by around 5 million during the quarter to 301.8 million, accounting for 80.5% of its mobile subscriber base, compared with 80.1% three months earlier. The company has been trying to move customers towards higher-value services as data consumption rises and network investments increase.
Its Fast Lane offering for postpaid customers is another part of this strategy, with Airtel using 5G network slicing to provide eligible users with a differentiated network experience. While the company has not linked the record postpaid additions directly to Fast Lane, the offering gives customers an additional reason to move to higher-value plans.
The prepaid restructuring also reflects the constraints Airtel faces in raising tariffs across the board. Airtel’s tariffs are already at a premium to those of Reliance Jio, making another headline increase potentially difficult unless its larger rival follows suit. A broad-based hike could therefore widen the price gap and make Airtel’s plans less competitive.
Instead, Airtel appears to be relying on changes to its pricing architecture to raise realisations from existing customers. The company’s management has said the industry’s longer-term pricing architecture still needs to be repaired for sustained Arpu growth and that simplifying the pricing ladder is part of this process.
The latest changes leave Airtel’s entry-level Rs 199 plan untouched while reducing the number of intermediate price points. This allows the company to push customers up the value chain without calling it a tariff hike, marking a shift from industry-wide price increases towards more selective Arpu expansion.