Bharti Airtel, second-largest telecom operator in India, has reported its average revenue per user (ARPU) at Rs 250 at the end of Q1 FY26. The telecom operator wants to reach its ARPU goal of Rs 300 as soon as possible. India's tariff architecture is not optimum, and needs repair, said Gopal Vittal, CEO of Bharti Airtel.
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At this point, in absence of tariff hikes, the telco is focusing on upgrading feature phone users to smartphones, data monetisation and converting prepaid users to postpaid services. Airtel added 0.7 million postpaid users in Q1 FY26.
Vittal, speaking to analysts at Q1 FY26 earnings call, said, "At the entry level itself or just above entry level, you get so much data allowance, so much of calling and messaging that you don’t really have any reason to upgrade. If there was a more sensible architecture, like you have got in Indonesia, then we would be sitting on an ARPU that is substantially higher than where India is today."
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The CEO was basically hinting at the tariff structure they have talked about in the past where consumers who consume more, pay more. "It’s just an unfortunate situation where the people who can afford to pay are paying less than the poor. We don't have to charge the poor anymore," said Vittal.
The telcos understand well that they can't really increase the base tariffs any further or it will affect the poor population of the country. Focusing on this, the new tariff structure hinted by Airtel will ensure that people who are consuming less should pay less. The next round of tariff hikes will be important for the industry. Any rise in base tariffs would result in heavy subscriber churn or SIM consolidations. This is not someething telcos would want.
