Bharti Airtel has discontinued its Rs 299 base plan, a move analysts say amounts to an effective tariff hike, as customers on lower-priced plans are pushed towards the Rs 345 offering, now the company's cheapest unlimited plan.
Speaking to NDTV Profit, Piyush Pandey, Equity Analyst and SVP, Telecom Sector at Centrum, said the move would help Bharti Airtel improve its average revenue per user (ARPU), a metric that has remained a key focus area for the company over recent quarters.
"It is sort of effectively terrifying because some of the base plans have been removed and customers would now move to higher priced plans. So effectively, it can drive ARPU improvement for Bharti Airtel," Pandey said, estimating the net impact at close to 2%.
Rivals Likely To Follow
Pandey said Vodafone Idea and Jio could adopt similar changes to their prepaid portfolios as they too look to shore up ARPU. He added that a broader, industry-wide tariff increase may follow within the next four to six months, given that the last major hike came in July 2024.
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"A tariff hike is expected. And it also demonstrates the pricing power of Bharti Airtel," he said, noting that such increases have historically occurred in India every two to five years.
Centrum Maintains 'Buy' On Bharti Airtel
Pandey said Centrum continues to rate Bharti Airtel a “buy”, citing steady subscriber additions, growth in 4G and postpaid users, stable margins and moderating capex. Strong performance by its Africa business and Indus Towers also supports the outlook.
For Vodafone Idea, Pandey said the December quarter showed some improvement, with subscriber additions continuing, but the company still needs to complete its fundraising and step up capex. “The task remains challenging but not impossible,” he said, adding that at around 13 times FY28 earnings, the stock offers limited upside and Centrum remains “neutral” on it.
ALSO READ: Airtel Discontinues Popular Rs 299 Plan: Here's What Customers Pay Now
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