Airtel Revives ₹299 Plan Amid Subscriber Churn and Market Pressure

In a surprising move, Bharti Airtel Ltd. has reinstated its ₹299 entry-level prepaid plan, just months after scrapping it in an effort to encourage customers to spend more. This decision comes on the heels of a notable slowdown in subscriber additions and an increase in customer churn during the September quarter of 2026. The reinstatement of the ₹299 plan, which offers 1.5GB of daily data and unlimited 5G access, underscores the difficulties faced by telecom operators in India's price-sensitive market, particularly when competitors like Reliance Jio and Vodafone Idea have opted to maintain their entry-level offerings.

Airtel's decision to bring back the ₹299 plan is a direct response to its disappointing performance in the September quarter, where the company added only 716,000 subscribers, bringing its total wireless base to 377.2 million. This figure is a stark contrast to the 3.3 million subscribers added in the previous quarter, indicating a significant decline in growth momentum. The churn rate, which reflects the percentage of customers leaving the service, has also raised concerns among analysts and investors alike.

Shashwat Sharma, managing director and CEO of Airtel India, acknowledged the challenges during a recent earnings call, stating, "The churn we saw in Q2 is largely a combination of two things: seasonality in Q2, and the prepaid intervention we took, which always has a temporary impact on customer continuity." This admission highlights the delicate balance Airtel must strike between maintaining profitability through higher tariffs and retaining its customer base in a competitive landscape.

The reinstatement of the ₹299 plan is particularly significant given the competitive dynamics of the Indian telecom market. Rivals such as Reliance Jio and Vodafone Idea have not followed Airtel's lead in removing their entry-level plans, focusing instead on expanding their market share. Jio, for instance, added a net 9.1 million subscribers in the same quarter, bringing its total to 542.4 million, further solidifying its position as the market leader.

Analysts suggest that Airtel's move to reintroduce the ₹299 plan may be an attempt to balance volume and value-led growth. Faisal Kawoosa, chief analyst at Techarc, noted, "By bringing back the entry-level tariff plan, Airtel could now be looking at balancing the volume and value-led growth. The elasticity is always high at the entry-level or lower tier market, which will definitely port out if another operator is offering a cheaper plan." This statement underscores the importance of competitive pricing in retaining customers, especially in a market where price sensitivity is paramount.

Despite the challenges in subscriber growth, Airtel has managed to maintain a lead over Jio in terms of Average Revenue Per User (ARPU), a critical metric for assessing the financial health of telecom operators. In the September quarter, Airtel's ARPU rose by 2.7% sequentially and 6% year-on-year to ₹271. In contrast, Jio's ARPU increased by only 1.5% sequentially and 3.5% year-on-year to ₹218.8.

Sharma emphasized the potential for continued ARPU growth, stating, "On ARPU, we continue to see significant headroom from the levers we have spoken about: upgrades of plans, postpaid, international roaming, and top-ups." This focus on enhancing ARPU is crucial for Airtel as it navigates the challenges of subscriber retention and competitive pricing.

Looking ahead, Airtel's strategy appears to involve a careful recalibration of its pricing structure to address both customer retention and revenue growth. The reintroduction of the ₹299 plan may serve as a temporary solution to curb churn while the company explores other avenues for revenue enhancement. In March, Bharti Enterprises chairman Sunil Bharti Mittal indicated that an ARPU of ₹350 would be ideal for ensuring the sustainability of telecom operations in India.

As Airtel continues to adapt to the evolving market landscape, the company must remain vigilant in monitoring competitor actions and customer preferences. The reinstatement of the ₹299 plan reflects a broader trend in the telecom industry, where operators must balance the need for profitability with the realities of a highly competitive and price-sensitive market.

The telecom landscape in India is rapidly evolving, and Airtel's latest move to reinstate its ₹299 plan may be a pivotal moment in its strategy to regain subscriber momentum while navigating the complexities of the market. As the competition continues to intensify, Airtel's ability to adapt and innovate will be crucial for its long-term success.