Airtel restores Rs 299 prepaid plan after Q2 subscriber slowdown

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Bharti Airtel has restored its Rs 299 prepaid plan after a sharp slowdown in mobile subscriber additions and an increase in customer churn in the September quarter, following its decision to withdraw the entry-level recharge pack in August.

The plan is now listed on the company's website. The telecom operator during the Q2 earnings call on November 6 said the impact of the Q2 prepaid pricing intervention had largely played out and that it would focus on other levers, including plan upgrades, postpaid, international roaming and top-ups, to drive average revenue per user (ARPU) growth in the coming quarters.

Airtel's mobile user churn increased to 2.9% in the September quarter from 2.6% in the preceding quarter, while subscriber additions fell sharply. Analysts attributed the moderation in addition partly to the withdrawal of the Rs 299 plan, which affected customers in the lower-value segment.

The plan, which offered 1GB of data per day for 28 days, was discontinued in August. Subscribers seeking a 28-day plan with a daily data allowance had to move to the Rs 349 pack, which cost 16.7% more but offered 1.5GB of daily data and unlimited 5G access. Airtel has since brought back the Rs 299 plan.

The company has not yet responded to Moneycontrol's request for comment on the reintroduction of the Rs 299 prepaid plan.

The operator added 716,000 mobile subscribers during the quarter, sharply lower than the 3.3 million users added in the preceding three months. Its wireless subscriber base stood at 377.2 million at the end of September. The company's total customer base, including fibre-to-the-home (FTTH), machine-to-machine and wireline connections, increased to 498.7 million from 491.9 million in the previous quarter.

Airtel management acknowledged that pricing interventions typically have a temporary impact on customer continuity as operators balance revenue growth, subscriber retention and value maximisation. The company, however, said it was seeing early signs of improvement in subscriber trends in the current quarter.

“Whenever there's a pricing intervention there is a temporary impact on customer continuity. So that is given. We try to balance it out and the things are around being accretive to revenue, customer continuity and value maximisation,” Soumen Ray, Group Chief Financial Officer of Bharti Airtel, said during the company's Q2 FY27 earnings call.

Ray was referring to the more pronounced deterioration in subscriber additions at Bharti Hexacom, Airtel's subsidiary operating in Rajasthan and the Northeast, where severe weather conditions in the Northeast disrupted customer continuity.

He said the impact in the region was compounded by “very adverse weather impacts”, which affected customer continuity significantly during the quarter. “We are seeing improvement, significant improvement versus what we had in the last quarter. So let's watch the space for Q3. But we are seeing early signs of improvement,” Ray said.

Shashwat Sharma, managing director of Bharti Airtel India, said the impact of the prepaid pricing intervention undertaken in Q2 had largely played out. The company would now focus on other levers, including plan upgrades, postpaid, international roaming and top-ups, to sustain average revenue per user (ARPU) growth over the coming quarters.

Airtel reported an ARPU of Rs 271 for the September quarter, up from Rs 264 in the preceding quarter. The September-quarter figure also benefited from one additional day in the quarter.

The postpaid segment continued to perform strongly, with Airtel adding 1.2 million users during the quarter, taking its postpaid base to 31.2 million. The company said its focus on strengthening the postpaid proposition had led to strong performance in the segment. Postpaid customers accounted for 8.3% of its total customer base and nearly 30% of customer additions over the past four quarters.

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On postpaid pricing, Ray said the recent tariff intervention amounted to an increase of roughly Rs 50 and should broadly flow through to ARPU. He cautioned that there could be some deductions in the form of access charges for customers using international roaming services.

“Broadly, you know it is a Rs 50 increase. So barring a bit of ARPU, yes, certainly there could be some access charges for the people who actually go on international roaming. But at ARPU level, yes, broadly it should be a flow-through,” he said.