India’s major telecom service provider, Bharti Airtel, is in the limelight after reintroducing its Rs 299 prepaid recharge plan in November, following its withdrawal in August. However, the telecom operator has made a key change to the plan, reducing its daily data benefit from 1.5 GB to 1 GB.
Airtel had discontinued the Rs 299 plan in August as part of its strategy to encourage subscribers to upgrade to the Rs 349 plan, potentially increasing its average revenue per user (ARPU). However, competitors Reliance Jio and Vodafone Idea did not follow a similar move in this segment.
The Rs 299 plan is now back amid a slowdown in subscriber additions and an increase in customer churn, raising questions about the sustainability of tariff increases without broader participation from competitors.
Why did Bharti Airtel discontinue its Rs 299 recharge plan in August?
In August this year, Bharti Airtel withdrew its Rs 299 prepaid recharge plan as part of an attempt to encourage subscribers to upgrade to the Rs 349 plan. The strategy was aimed at improving the company’s average revenue per user (ARPU) by nudging customers towards higher-value recharge plans.
During its Q2 FY27 earnings conference call, Airtel’s management described the move as an ‘experiment’ on its subscriber base rather than a permanent structural change.
Why has Airtel reversed its Rs 299 plan?
Airtel’s decision to reinstate the Rs 299 plan comes against the backdrop of slowing customer additions and increasing churn.
The company’s Q2 FY27 performance highlighted some challenges in subscriber growth. Airtel’s quarterly customer additions declined sharply to 0.7 million from 3.2 million in Q1 FY27. Meanwhile, its churn rate increased to 2.9 per cent from 2.6 per cent in the previous quarter.
Airtel vs Jio: Subscriber additions, churn and ARPU
A comparison of Bharti Airtel and Reliance Jio’s Q2 FY27 numbers highlights the differences in their subscriber growth and revenue generation.
| Particulars | Company | Q2 FY27 | Q1 FY27 |
| Churn | Bharti Airtel | 2.90% | 2.60% |
| Churn | Reliance Jio | 1.60% | 1.60% |
| Customer Additions (million) | Bharti Airtel | 0.7 | 3.2 |
| Customer Additions (million) | Reliance Jio | 9.1 | 8.9 |
| ARPU (Rs/month) | Bharti Airtel | 271 | 264 |
| ARPU (Rs/month) | Reliance Jio | 218.8 | 215.6 |
The comparison shows that while Airtel reported a higher ARPU of Rs 271 compared with Jio’s Rs 218.8 in Q2 FY27, its subscriber additions were significantly lower.
Jio added 9.1 million customers during the quarter, compared with Airtel’s 0.7 million. Additionally, Jio maintained its churn rate at 1.6 per cent, while Airtel’s increased to 2.9 per cent.
Airtel’s ARPU improved from Rs 264 in Q1 FY27 to Rs 271 in Q2 FY27. Jio also reported an improvement, with its ARPU increasing from Rs 215.6 to Rs 218.8 during the same period.
Jio vs Bharti Airtel: Market Share Comparssion
Bharti Airtel has reclaimed its position as India’s second-largest listed company by market capitalisation, overtaking Jio Platforms. As of November 6, Airtel’s market capitalisation stood at Rs 13,14,998 crore against Jio Platforms’ Rs 12,95,158 crore. Reliance Industries retained the top spot with a market capitalisation of Rs 17,86,295 crore.
What do brokerages have to say about Airtel’s move to reintroduce the Rs 299 plan?
Following this move, global brokerages Morgan Stanley and Citi have shared their views on how Airtel’s business could fare going forward.
Global brokerage Citi believes Bharti Airtel’s decision to reinstate its Rs 299 prepaid plan reflects competitive pressures and elevated customer churn. The brokerage further noted that competing telecom operators did not follow Airtel’s earlier tariff action, making unilateral prepaid price increases difficult to sustain.
Airtel’s churn increased to 2.9 per cent from 2.6 per cent, while net subscriber additions declined to 0.7 million from 3.3 million. Citi had earlier estimated that the withdrawal of the plan could improve ARPU by around Rs 4 per month.
Another brokerage, Morgan Stanley, noted that Bharti Airtel’s performance was slightly below its estimates, with higher mobile churn attributed to seasonality and recent pricing interventions.
The brokerage believes premiumisation will drive ARPU growth in the absence of broad-based tariff hikes and expects industry-wide price increases in 1QCY27.
However, Morgan Stanley trimmed its India ex-passive EBITDA estimates by 4 per cent for FY28E and 3 per cent for FY29E. It also cut its target price by 4 per cent, citing lower core EBITDA estimates and changes in associate valuations.
Tailwinds and headwinds for Bharti Airtel
Beyond the Rs 299 plan reintroduction, Bharti Airtel faces several potential headwinds and tailwinds. Jefferies flagged weaker-than-expected performance in Africa, higher customer churn and a 50 per cent decline in free cash flow as concerns.
Morgan Stanley also highlighted elevated mobile churn and trimmed India EBITDA estimates for FY28 and FY29. However, Elara Capital expects ARPU growth to accelerate in H2FY27, while Airtel Africa’s revenue grew 20.6 per cent year-on-year in constant currency.
Jefferies highlighted record postpaid additions and strong Airtel Business growth, while Morgan Stanley sees premiumisation supporting ARPU.
Bharti Airtel Share Price Target
Both brokerages, Morgan Stanley and Citi, remain bullish on the telecom company. Morgan Stanley and Citi have maintained their ‘Overweight’ and ‘Buy’ ratings on the stock, respectively, with target prices indicating potential upside of up to 15 per cent from the current share price of Rs 2,083.25.
| Brokerage | Share Price Target | Rating | Upside% |
| Morgan Stanley | Rs 2,350 | OVERWEIGHT | 12.8% |
| Citi | Rs 2,390 | BUY | 14.72% |