"The rich are paying less”, Airtel flags India’s cheaper data pricing model as unsustainable

Bharti Airtel said India's current unlimited mobile data pricing model is unsustainable. The company argues that the system disproportionately benefits heavy internet users at the expense of lower-income consumers who are already stretched to their financial limits.

The remarks reflect a broader shift in the telecom industry’s view of India’s ultra-cheap data era, which has fueled massive growth in video streaming, social media usage, online gaming, and always-on internet consumption. "The rich are paying less than they ought to, and the poor are perhaps paying as much as they need to," Bharti Airtel Vice Chairman Gopal Vittal said during the company's fourth-quarter earnings call.

Airtel noted that India’s mobile data tariffs remain significantly lower than those in global markets. Vittal said that unlimited plans in regions such as the United States and Europe priced much higher than in India. According to the company, the concern is not just about low entry-level pricing, but also about a flat pricing structure that allows both light and heavy data users to pay nearly the same rates. Airtel suggested that the telecom sector may eventually move toward differentiated pricing models based on varying data usage slabs and allowances.

India’s low-cost data ecosystem has been instrumental in driving explosive growth in mobile internet consumption over the past few years. Affordable unlimited plans accelerated the adoption of streaming platforms, short-video apps, gaming, and social media services.

However, Airtel said the current structure leaves limited scope for revenue expansion, as users consuming large amounts of data are still covered under flat-rate unlimited plans. "At about INR340, INR350, you're capped out because you're running unlimited data plans," Vittal said.

Despite these concerns, Airtel sees opportunities to increase revenue through upgrades to larger prepaid plans, growth in postpaid subscriptions, and higher uptake of international roaming packs. The company added that rising data consumption continues to support business growth.

Airtel also highlighted concerns around rising smartphone prices, warning that costlier handsets could slow the upgrades for some users.

The company said prices of handsets have risen sharply in recent weeks, creating pressure in the shift from feature phones to smartphones. "We haven't yet seen any impact, but we can't rule it out," Airtel Managing Director and Chief Executive Officer Shashwat Sharma said during the earnings call.

Airtel added 4.7 million mobile customers in the March quarter, including 5.8 million smartphone users. The company reported an average revenue per user of Rs 257 for the quarter.

The company said it plans to focus more on higher-paying postpaid users and customers upgrading to plans with higher data usage.