Bharti Airtel tweaks prepaid pricing: Target price; will Vodafone Idea, Jio follow suit?

Bharti Airtel’s latest changes to its prepaid tariff ladder are aimed at driving organic average revenue per user, or ARPU, growth through selective premiumisation, but they may also point to a further delay in a broader industry-wide tariff increase, MOFSL warned in its latest note. The brokerage said this is against its current estimate of a 15 per cent hike from the December quarter.

Bharti Airtel has discontinued several prepaid plans across India, including its entry-level daily data limit plan priced at Rs 299 for 28 days with 1GB data per day. With this, the Rs 349 plan, which offers 1.5GB data per day for 28 days, has effectively become the company’s entry-level unlimited data plan, marking a 17 per cent increase at that level.

MOFSL said the actual flow-through of the latest pricing changes to ARPU will depend on whether Reliance Jio and Vodafone Idea replicate Bharti Airtel’s move, and on the share of data users who were on the Rs 299 plan. It also noted that telecom operators, including Jio, had earlier rationalised the entry-level Rs 249 plan in August 2025, which led to mixed results across companies.

In its note, MOFSL said, “We await the competitors’ response to Bharti’s move before we tweak our estimates. Prima facie, we believe select tariff interventions could potentially drive up blended ARPU by 6-7 per cent over the medium term through better monetisation from pre-paid data subscribers estimated to be 73 per cent of Bharti’s subscribers and 75 per cent of its revenue mix.”

The brokerage said Bharti Airtel has discontinued not only the Rs 299 plan but also a range of other prepaid plans such as Rs 319, Rs 579, Rs 619 and Rs 649. It said the removal of select plans has effectively raised the price of Bharti Airtel’s entry-level unlimited data plan to Rs 349, while maintaining a Rs 50 per cycle premium over Jio’s Rs 299 entry plan.

MOFSL said that, with unlimited 5G data offerings starting from Rs 349 and average data consumption at 34.4GB per month for Bharti Airtel, the share of users on the Rs 299 plan would likely have declined over the past few quarters. It added that the number of users on the other discontinued plans was likely insignificant, which could limit the upside to ARPU.

Based on its workings, MOFSL said Bharti Airtel’s ARPU from prepaid data subscribers, who account for about 73 per cent of its user base and around 75 per cent of wireless revenue, stood at Rs 275 in 1QFY27, up organically from about Rs 259 in 3QFY25. It said the latest pricing revision has removed tariff plans that were ARPU-dilutive for the prepaid data subscriber cohort and has raised the minimum ARPU from daily data limit plans for 28 days to Rs 321. ARPU for longer-validity daily data plans ranges from Rs 254 to Rs 316.

The brokerage said these pricing changes could lift its estimated prepaid data subscriber ARPU for Bharti Airtel from Rs 275 to Rs 300, implying growth of about 9 per cent for that cluster and organic blended ARPU upgrades of 6-7 per cent over the medium term. It added that Bharti Airtel had said in its latest earnings call that premiumisation remains a key near-term driver of ARPU growth, while changes in tariff structure are an important lever for sustainable ARPU growth over the medium term.

MOFSL said the latest step may help prevent near-term earnings downgrades even as the wait for a broader correction in pricing architecture continues. It noted that a Rs 10 per month change in ARPU leads to an about Rs 34 billion, or 2.5 per cent, change in Bharti Airtel’s consolidated EBITDA and about Rs 75 per share, or 3.2 per cent, change in its target price. The brokerage has maintained its Buy rating on Bharti Airtel with a target price of Rs 2,335.

Overall, MOFSL said Bharti Airtel’s prepaid pricing changes are a move towards selective premiumisation and medium-term ARPU growth, though the full impact will depend on competitor action and user migration, while a broad-based tariff hike may now take longer than earlier expected.