Higher data users should pay more, says Bharti Airtel's Gopal Vittal

Bharti Airtel says India's telecom sector must overhaul data pricing, warning that sustainable ARPU growth depends on higher-paying heavy data users, not entry-level tariff hikes

Bharti Airtel Executive Vice-Chairman Gopal Vittal on Wednesday emphasised the need for change in tariff pricing in the Indian market, noting that higher data-using subscribers paying more was more crucial than simply raising general rates for carriers to be financially sustainable in the long term.

 

“The most important thing is to repair the (pricing) architecture, meaning that for a very low level of pricing, you get unlimited data, which means ARPU (average revenue per user per month) is capped. That is not a healthy way to operate. Because markets naturally expand from small to extra-large, and if you just operate with a more sensible price architecture, my view is, in the next five to seven years, you will see sustained growth just on account of ARPU as India gets more affluent. That would be a good place to go, and there is no need to touch the entry-level pricing,” Vittal said. 

 

“The way that we really need to think about price architecture as an industry needs to fundamentally change over the next few years,” he said during the company’s first quarter of financial year 2026-27 (Q1FY27) earnings call. However, in the absence of the pricing architecture changing to higher data users paying more, telcos may well raise tariffs in order to keep up their ARPU levels, required for financial sustainability. 

ARPU is a key metric of profitability for telcos. Analysts have said that telcos would have to undertake another round of tariff hikes, ranging between 10 per cent and 15 per cent, within this year in order to sustain investments into building 5G networks in the hyper-competitive Indian telecom sector. Carriers have raised tariffs three times since 2019. 

Airtel Managing Director and Chief Executive Officer (MD & CEO) Shashwat Sharma highlighted that changing the pricing architecture was required to be done by all players. “The longer term pricing architecture of the industry still needs to be repaired, and industry must charge for data consumption. This is paramount for sustained ARPU growth in the longer term,” he said. 

In response to a question on deployment of capex of about $4 billion in the coming year, Vittal said that it would be scaled up for building data centres under Nxtra, and the company may also raise debt, if required, in addition to the $1 billion raised from the Carlyle group and Alpha Wave Global. 

“We believe that our market share here at about 12 per cent is clearly low for the large heft and size that we have as a company. We're working towards our ambition to build data centre capacity of 1 gigawatt (Gw) in the next few years. Many of those contracts have been stitched up. We're also in the process of acquiring more land in the right locations,” he said.

Vittal also noted the growth opportunities presented by the Africa market in the coming few years. He said that the group will drive synergies between the India and Africa businesses, after having raised Airtel’s stake in the Africa entity to 79 per cent in the quarter. Airtel Africa’s mobile money business is also planning for a London Stock Exchange listing before the end of 2026.

“We expect Africa to punch above its weight. The contribution of Africa will keep growing in the overall portfolio... the investments into Africa will continue to step up,” Vittal added. 

Following the launch of Fastlane 5G slicing for postpaid, Vittal noted significant room for growth in the postpaid segment, driven by high-spending prepaid customers who are ideal candidates for transition to postpaid plans. 

Sharma said that due to Fastlane service, the carrier saw its postpaid numbers rise in Q1FY27 along with ARPU. “In mobile ARPU, we see substantial headroom within the current customer base itself, because there's enough upgrade that's happening, which is driven by consumption of data, moving to unlimited plans, as well as an acceleration on the postpaid with the differentiation we have brought with Fastlane technology,” he said. 

He flagged the rising global memory and chipset pricing that has challenged fixed wireless access (FWA) rollouts and increased churn. The company has, therefore, pivoted back to deploying fiber in 400 key cities and deploying FWA in places where fiber is not reachable.