's net mobile subscriber additions plunged 78% sequentially in the September quarter after the telecom operator withdrew its Rs 299 entry-level prepaid smartphone plan, triggering higher customer churn as it pushed to improve its subscriber mix and average revenue per user (ARPU).




The company added just 7.2 lakh net mobile subscribers in the second quarter of FY27, down from 32.7 lakh in the June quarter, according to a research report by Citi. The withdrawal of the Rs 299 plan in August pushed mobile churn to 2.9% from 2.6% in the preceding quarter, the brokerage said.




The subscriber slowdown, however, did not translate into weaker financial performance. Higher revenue per user helped offset the impact of lower additions, with Airtel's India mobile revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) growing 3.4% and 3.8%, respectively, on a sequential basis. Both figures were 1% ahead of Citi's estimates.



Airtel's premiumisation push comes at a subscriber cost


Citi attributed the sharp moderation in net additions to Airtel's decision to rationalise its prepaid portfolio by discontinuing the Rs 299 entry-level smartphone plan in August.




The move appears to have increased customer attrition even as the company sought to prioritise higher-value subscribers. Citi said it was awaiting further clarity from management on whether the elevated churn would reverse in the December quarter.




Airtel's total mobile subscriber base stood at 37.7 crore at the end of September. Additions in the 4G and 5G segments also moderated, falling from a quarterly run rate of around 50 lakh to 30 lakh, taking the combined subscriber base to 30.5 crore.




The postpaid segment, meanwhile, showed stronger momentum. Additions rose to 12 lakh during the quarter, compared with the usual quarterly range of 6 lakh to 10 lakh, taking Airtel's total postpaid subscriber base to 3.1 crore.



Higher ARPU cushions impact of slower additions


Airtel's average revenue per user (ARPU) increased to Rs 271 in the September quarter from Rs 264 in the preceding three months, beating market expectations of Rs 268.




India mobile revenue stood at Rs 30,900 crore, while operating profit reached Rs 18,900 crore. The operating margin expanded 23 basis points sequentially to 61%. On a year-on-year basis, India mobile revenue and operating earnings grew 10% and 11%, respectively.




India capital expenditure, excluding Indus Towers, declined to Rs 7,400 crore from Rs 8,000 crore in the previous quarter, remaining within management's guidance.




At the consolidated level, net debt rose 6% sequentially to Rs 1.67 lakh crore following dividend payouts. Airtel Business also reported an 11% increase in revenue and 15% growth in operating profit.




Citi expects Airtel's ARPU to continue improving, supported by the prospect of future tariff increases and a shift towards higher-value customers. The brokerage identified migration from 2G to 4G and 5G, prepaid to postpaid connections, higher data consumption and international roaming as factors that could support further growth in average revenue per user.



(With inputs from ANI)