Airtel Pivots to AI and Cloud, Chasing Premiumization in India's Telecom Duopoly

As of August 2025, Bharti Airtel, India's second-largest telecom operator, is recalibrating its strategy to go head-to-head with market leader Reliance Jio in the country's increasingly duopolistic telecom landscape. Rather than chasing market share, Airtel is now curating growth by incrementally shifting towards services that deepen customer engagement and drive premiumization.

The company has already embarked on an AI journey, as evidenced by its recent partnerships with Perplexity AI, Google Cloud, and global telcos via its Xtelify platform. While the marketing upside and user engagement potential of these initiatives are clear, experts remain uncertain about their immediate revenue contribution.

Nonetheless, with 5G-related capital expenditure mostly behind it, Airtel is now directing its resources towards expanding its portfolio of digital services, including home, mobile, financial, and enterprise offerings. However, these new avenues are not yet big enough to overshadow the company's legacy telecom segment, at least in the medium term.

Airtel's focus on premiumization is evident in its home services segment, which includes broadband, direct-to-home (DTH), and smart-home solutions. This vertical outperformed all others in the first quarter of 2025-26, with the company adding a record 939,000 broadband users. Going forward, Airtel aims to raise its quarterly net home-services additions to 2.5 million from the current 1.6 million run rate.

As Airtel transitions into a "digital experience orchestrator" from a mere telecom service provider, it is taking a more open, modular, and customer-centric approach, in contrast to Jio's vertically integrated ecosystem. The company's latest AI and cloud bundling strategies underscore this ethos, as it offers users free access to Perplexity AI's generative search assistant and Google One cloud storage.

Airtel's digital services ambitions hinge on aggressive premiumization of its telecom business, but experts caution that without an industry-wide tariff hike or sharp postpaid conversion, ARPU expansion may lose momentum. Nonetheless, the company's focus on high-quality connectivity and digital services as lifestyle offerings, rather than mere utilities, could pay dividends in the long run.