IGI Logo

Bharti Airtel has raised postpaid prices by INR50/month across its postpaid offerings with effect from 8th Oct’26, with tariffs rising by ~3-11% across plans. The new postpaid plans provide free roaming for one international trip per year.

Postpaid customers account for 8% of Bharti’s subscriber mix, but likely higher ~12% of its wireless revenue mix. On a ballpark basis, the postpaid price hike could drive a ~1% uptick in blended ARPU, but with some offset from the free international roaming pack. We were already building in a price hike of INR50/month in postpaid plans, alongside the ~15% prepaid smartphone tariff hike in Dec’26. Hence, an early postpaid tariff hike would not drive meaningful earnings upgrades but would help to offset any ARPU dilution from the potential launch of voice-only packs with a validity of 28-30 days. However, we note that in the past tariff hike cycles (2019, 2021), postpaid tariff hikes had preceded prepaid tariff hikes by ~6-9 months, and we would expect broader industry-wide tariff hikes to follow soon. Recent pricing rejigs (removal of INR299 entry-level smartphone data plan) and the postpaid tariff hike should help Bharti sustain its outperformance on ARPU growth (vs. peers), in our view. Reiterate our BUY rating on Bharti with a TP of INR2,250.

Bharti postpaid pricing tweaks could drive ~1% blended ARPU uptick

* Bharti has raised plan prices by INR50/month across its postpaid offerings with effect from 8th Oct’26, with prices rising by ~3-11% for various plans. The new postpaid plans also provide free roaming for one international trip on an annual basis (matching Vi’s recent postpaid offering on free international roaming).

* Postpaid customers account for ~8% of Bharti’s subscriber mix, and the customer base has grown by 12-13% YoY for the past several quarters (compared to ~3% YoY growth in prepaid subscribers), albeit on a lower base.

* Typically, the churn in the postpaid base is lower and the revenue contribution is higher, as there is greater flexibility in data usage (no daily data limits), content bundling, and family packs. We estimate postpaid subs account for ~12% of Bharti’s wireless revenue.

* On a ballpark basis, the postpaid hikes could drive ~1% blended ARPU uptick for Bharti. However, there would be some ARPU dilution from free international roaming for one trip in a year (international roaming plans start at INR999).

* Further, we were already building in a price hike of INR50/month in postpaid plans from Dec’26, alongside the broader ~15% prepaid smartphone tariff hikes. Hence, we do not expect any significant increase in our near-term ARPU estimates based on slightly earlier postpaid tariff hike

Past precedents suggest prepaid tariff hike could follow in next six months

* We note that the rejig in postpaid plans had preceded prepaid tariff hikes by 6-9 months in 2019 and 2021 tariff hike cycles.

* As Bharti is the market leader in the postpaid segment and RJio does not have a meaningful presence, the company had in the past tweaked postpaid plans to gauge the response from customers/competition before implementing prepaid tariff hikes.

* We note, in May’19, Bharti had discontinued its entry-level postpaid plan (INR299), which was followed by a prepaid tariff hike in Nov-Dec’19.

* Similarly, in Jul’21, Bharti had restructured its family postpaid plans by removing INR749 plan for new customers and increasing the price per add-on SIM on a family postpaid plan by INR50. Further, the company had also raised the prices of its entry-level corporate postpaid plans from INR199 to INR299. These actions were also followed by a prepaid tariff hike in Nov-Dec’21.

* In the Jun-Jul’24 tariff hike cycle, which was led by RJio, both prepaid and postpaid plan prices were revised at the same time.

* Based on the past precedents, we believe these postpaid tariff hikes would also likely be followed by prepaid tariff hikes within the next six months (currently we expect 15% smartphone plans tariff hike in Dec’26).

* We believe the latest pricing tweaks (removal of INR299 entry-level unlimited prepaid data plan and postpaid price hikes) are a step to boost ARPU in the absence of the broader smartphone tariff hikes and could offset any dilution from the potential launch of voice-only packs in 28/30 days.

* Overall, the recent pricing rejigs should help Bharti sustain its outperformance in ARPU growth (vs. peers), in our view. We believe the risk-reward is attractive for Bharti and reiterate our BUY rating with a TP of INR2,250.

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412