Will Bharti Airtel’s ARPU increase after scrapping Rs 299, other popular prepaid plans? What JM Financial says

Bharti Airtel is expected to see a 2% increase in its average revenue per user (ARPU) following the withdrawal of four entry-level prepaid unlimited plans, according to JM Financial. The telco removed plans priced at Rs 299, Rs 579, Rs 619 and Rs 649, while keeping the Rs 199 and Rs 219 plans unchanged. This change has resulted in a price increase of around 16% for subscribers who previously opted for the Rs 299 plan, which is now replaced by the Rs 349 pack.

JM Financial notes that other telecom companies have not made similar adjustments yet but may follow Bharti Airtel's lead in the near future. The brokerage believes that this move is not a broad tariff hike but rather a plan modification aimed at encouraging subscribers to upgrade to higher GB and higher ARPU plans. The brokerage predicts that around 10% of Bharti Airtel's subscribers will upgrade to the new plans at a higher tariff, which could lead to a 2% increase in wireless ARPU and 1% in India EBITDA and valuation.

The brokerage has a 'Buy' rating on Bharti Airtel shares, with a target price of Rs 2,400 each, suggesting over 23% upside potential from the stock's previous closing price of Rs 1,945.