Airtel's Subscriber Growth Plunges 78% After Rs 299 Plan Exit
Bharti Airtel's net subscriber additions dropped 78% in Q2 after the withdrawal of the Rs 299 plan, according to a Citi report.
Bharti Airtel has witnessed a sharp decline in its net mobile subscriber additions during the September quarter, with growth plummeting by 78 per cent. According to a research report by Citi, the telecom giant added only 7.2 lakh subscribers in Q2, a steep fall from the 32.7 lakh additions recorded in the preceding June quarter.
The Impact of Plan Rationalisation
The primary catalyst for this downturn appears to be the company's decision to discontinue its entry-level prepaid smartphone plan priced at Rs 299 in August 2026. This strategic move, aimed at premiumisation, led to an increase in mobile churn, which rose from 2.6 per cent to 2.9 per cent during the second quarter.
Citi analysts noted that the decline in net additions from 3.3 million to 0.7 million on a quarter-on-quarter basis is likely a direct result of this plan rationalisation. The market is now awaiting further clarification from Airtel's management on whether this trend will reverse in the third quarter.
Shift in Subscriber Mix: 4G/5G vs Postpaid
The report highlights a shifting trend in how users are joining the network:
- 4G and 5G Segments: Quarterly additions in these high-speed segments dropped from a run rate of approximately 50 lakh to 30 lakh, bringing the total base to 30.5 crore.
- Postpaid Growth: In contrast, the postpaid segment showed strong momentum. Additions surged to 12 lakh, surpassing the previous quarterly range of 6 lakh to 10 lakh, pushing the total postpaid base to 3.1 crore.
Overall, Bharti Airtel's total mobile subscriber base now stands at 37.7 crore.
Financial Resilience and ARPU Growth
Despite the dip in subscriber numbers, Airtel's financial health remained robust. The "premiumisation" strategy—which included the withdrawal of the budget plan—helped boost the Average Revenue Per User (ARPU). ARPU climbed to Rs 271, exceeding the market expectation of Rs 268 and rising from the previous quarter's Rs 264.
The financial highlights for the India mobile business include:
- Revenue and Profit: India mobile revenue reached Rs 30,900 crore, while operating profit hit Rs 18,900 crore.
- Growth Rates: On a year-on-year basis, India mobile revenue grew by 10 per cent and operating earnings increased by 11 per cent.
- Margins: Earnings margins expanded by 23 basis points, reaching 61 per cent.
Expenditure and Business Expansion
India capital expenditure, excluding Indus Towers, was recorded at Rs 7,400 crore, down from Rs 8,000 crore in the previous quarter, staying within the guidance provided by management. However, consolidated net debt rose by 6 per cent sequentially to Rs 1.67 lakh crore, following dividend payouts.
The company's B2B arm, Airtel Business, also showed strong performance, reporting an 11 per cent rise in revenue and a 15 per cent growth in operating profit.
Looking Ahead
Citi suggests that Bharti Airtel's ARPU will continue to improve, driven by the visibility of future tariff hikes and a better subscriber mix. This includes the migration of users from 2G to 4G/5G, the shift from prepaid to postpaid, increased data consumption, and higher usage of international roaming.