Airtel ARPU will cross Rs 300 very soon, need to upgrade customers, says CEO Shashwat Sharma

New Delhi: Bharti Airtel expects its average revenue per user (ARPU) to cross ₹300, helped by a surge in the share of postpaid customers to 20% over the long term from about 8% now, chief executive officer and managing director Shashwat Sharma said.

"I believe it's around the corner... We can go much beyond ₹300 as well," Sharma told ET in his first interview since taking charge early this year.

Readmore: Airtel hikes postpaid plans by Rs 50, adds free annual international roaming


Airtel currently has an industry-leading ARPU of ₹264.

The company had 30 million postpaid subscribers as of June 30, accounting for about 8% of its customer base, and added nearly 1.05 million postpaid users during the quarter, its highest quarterly addition.

It is betting on initiatives such as Fastlane and tweaking of tariffs to nudge a segment of its about 346.5 million pre-paid subscribers to upgrade to postpaid.

Read more: Apply same rules on satcom players intending to use spectrum being used by mobile players: Airtel

"We believe we need to upgrade a lot of customers," Sharma said, describing postpaid upgrades as "a great lever in the industry." Postpaid accounts for about 12% of Airtel's revenue, he noted.

The quarterly pace of postpaid additions has accelerated from roughly 800,000 to about 1-1.1 million in the reported first quarter, an increase of around 30%.

When asked about Airtel's recent tariff hike of ₹50 for postpaid plans, Sharma said, "People have to pay for consumption... Entry-level, inclusive plans have to stay where they are."

His comments point to two opportunities for revenue growth: persuading more subscribers to choose richer postpaid packages and restructuring industry tariffs so that customers pay more as their data consumption increases.

Airtel recently launched its Fast Lane service, promising superior network quality based on 5G-slicing technology. The carrier is also seeking to drive upgrades through packages combining data, family connections, entertainment and international roaming benefits.

Sharma said family plans offer particular value when households add second and third connections. The opportunity, he said, lies in offering differentiated experiences that encourage customers to upgrade.

Citing Indonesia and the Philippines as examples, Sharma said tiers of plans ranging from small to extra-large and a better pricing structure could allow the industry to sustain annual ARPU growth of 5-7%.

Asked whether Reliance Jio's upcoming public market listing could lead to fewer discounts and a change in telecom pricing, he said, "I think that's a big capital market event in the country. I wish them best... But I think this correction of pricing architecture may or may not be linked to this IPO... It's an industry problem."

Beyond mobile services, Sharma expressed confidence in the data centre business.

Asked about the planned expansion to 1 GW of capacity, he said anchor demand and healthy returns could make it a strong long-term business.

"The business has very healthy returns," he said, explaining that while capital is invested upfront, returns accrue over a long period. "It pays off for 20-25 years."

(Himanshi Lohchab contributed to this article)