Bharti Airtel’s decision to raise postpaid plan prices has revived the question investors have been asking for months: will prepaid tariffs be next? Brokerage Motilal Oswal Financial Services (MOFSL) thinks so, and has reiterated its “Buy” rating on the stock.
What Airtel Changed
Airtel raised the monthly rental on its postpaid plans by ₹50, and the entry-level plan now starts at ₹499, up from ₹449. The line-up now runs from ₹499 for a single user to ₹1,799 for a family of five. The new prices include one free international roaming trip per SIM per year, and bundled streaming and music benefits grow with the plan price. Existing postpaid customers will be moved to the new plans within a month.
This is the first notable pricing action since the broad industry tariff hike of July 2024. It also follows Airtel’s August move to scrap its entry-level ₹299 prepaid plan, along with a few other prepaid packs.
Why MOFSL Expects a Prepaid Hike
MOFSL points to history. According to the brokerage, a rejig in postpaid plans preceded prepaid tariff hikes by six to nine months in both the 2019 and 2021 cycles:
- 2019: Airtel discontinued its ₹299 entry-level postpaid plan in May, followed by a prepaid hike in November to December.
- 2021: A similar pattern led to a prepaid hike in November to December.
- 2024: Both prepaid and postpaid prices were raised together, led by Jio.
Based on these precedents, MOFSL says the postpaid hike will likely be followed by a prepaid increase within the next six months. It currently expects a 15% hike in prepaid smartphone plans in December 2026, and says it had already built in a ₹50 monthly postpaid increase in its estimates. The brokerage calls the risk-reward attractive.
What Is Not Certain
Airtel has not said a prepaid hike is imminent. The postpaid move is also small in revenue terms. Postpaid customers account for roughly 8% to 12% of revenue, and Airtel had about 30 million postpaid users at the end of June, around 8% of its 376.5 million India mobile subscribers. Independent telecom analyst Parag Kar said the hike is unlikely to have a major impact on blended ARPU.
How the Stock Reacted
Airtel shares rose about 1.5% to close at ₹1,837.80 on the NSE on October 7, after touching a day’s high of ₹1,854.70. The stock was trading around ₹1,834 on October 8. Reports suggest the move also puts pressure on Reliance Jio to follow, as it prepares to sell shares to public investors.
What Investors and Customers Should Watch
- Whether Jio and Vodafone Idea raise postpaid prices
- Any announcement on prepaid pricing, especially around December
- Upcoming quarterly results for ARPU trends
This article is for information only and is not investment advice. Analyst views can change. Consult a SEBI-registered adviser before investing.
Frequently Asked Questions
By how much has Airtel raised postpaid plans?
₹50 per month across plans. The entry-level plan is now ₹499.
Will prepaid plans get costlier?
MOFSL expects a prepaid hike within six months, but Airtel has not announced one.
What is MOFSL’s rating?
It reiterated a “Buy” rating on Bharti Airtel.
How much of Airtel’s revenue comes from postpaid?
Estimated at about 8% to 12%, though Airtel does not report it separately.
When did the industry last raise tariffs broadly?
In July 2024.
What happened to Airtel’s share price?
It closed at ₹1,837.80 on October 7, up about 1.5%.
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