Perplexity's strategic initiative to provide its premium AI service free of charge in India, in collaboration with the telecom provider Airtel, served as a significant experiment in user acquisition. The campaign successfully garnered millions of new users, propelling the company's growth within the Indian market, a region known for its vast internet population and competitive pricing. The subsequent revenue increase following the conclusion of the free access period offers early insights into the efficacy of such aggressive growth strategies in converting free users into a sustainable, paying customer base.
Details of the AI Service Expansion in India
In July 2025, the artificial intelligence company Perplexity entered into a groundbreaking alliance with Airtel, India's prominent telecom operator. This collaboration offered Airtel's extensive customer base of 360 million individuals a complimentary 12-month subscription to Perplexity Pro, a service valued at approximately $200. The enrollment period for this free offering concluded on January 16, with the first wave of free subscriptions expiring last month. Users were then faced with the choice of opting out of auto-renewal to avoid charges.
The impact of this initiative was immediate and substantial. Data from Sensor Tower indicates that Perplexity experienced a surge in app downloads in India, reaching 5.9 million in July 2025, marking a 625% increase from the previous month. This single month's downloads surpassed the total for the first half of that year. Over the seven-month period when the offer was active, Perplexity recorded 56 million downloads, a nine-fold increase compared to the preceding seven months. Monthly active users (MAU) more than doubled to 8.9 million in July, eventually reaching a peak of 22 million in October.
India, characterized by its enormous population and over a billion internet subscribers, represents a critical market for global technology enterprises. Its position as the world's second-largest smartphone market, with more than 700 million users, also makes it a fertile ground for generative AI services. Consequently, AI firms, including Anthropic, Google, and OpenAI, have increasingly pursued Indian consumers with localized, more affordable plans, free access, and strategic distribution alliances, aiming to eventually convert these users into paying customers.
However, once the free Airtel subscription window closed in January, Perplexity's downloads saw a sharp decline. Sensor Tower estimated a 90% drop in downloads between February and July, totaling 3.3 million. Despite this, the active user base remained robust, with nearly 14 million monthly active users in July, a 37% decrease from its peak but still five times higher than the average in the first half of 2025. This persistence suggests a strong retention of users despite the promotional period ending.
Crucially, the decline in downloads did not correspond with a reduction in revenue. Sensor Tower reported a 60% increase in Perplexity's in-app purchase and subscription revenue in India between February and mid-August, compared to the period when the Airtel offer was available. This trend continued even as early Airtel subscribers' free access expired, with daily in-app purchase revenue increasing by 9% from mid-July to mid-August, and 27% above the average for the first half of 2026. This suggests a notable conversion of users into paying subscribers, although the exact proportion of former Airtel users who actively chose to pay versus those who simply did not cancel auto-renewal remains unclear.
Appfigures, another app intelligence firm, corroborated Perplexity's growth trajectory in India, noting that the initial boom was unique to Perplexity, not a general rise in AI app interest. Perplexity's average daily downloads in India surged from 11,200 to nearly 223,000 during the first week of the offer, peaking at 305,000 daily between mid-September and mid-October. In contrast, downloads for ChatGPT and Claude remained stable. Appfigures also observed a significant increase in Perplexity's monthly net mobile revenue in India, rising from approximately $34,000 in January 2025 to $156,000 in July 2026, totaling an estimated $878,000 in the first seven months of 2026, a 16% increase from all of 2025.
This experiment by Perplexity serves as a precursor to similar strategies adopted by other major AI companies in India. OpenAI introduced a free one-year ChatGPT Go plan in August 2025, and Google partnered with Reliance Jio to offer its AI Pro subscription for 18 months. Perplexity's experience provides an early case study on whether these ventures can successfully convert free premium AI access into a paid service in a price-sensitive market, a test that will unfold further as more users reach their renewal dates.
The experience of Perplexity in the Indian market offers a compelling case study on the efficacy of freemium models and strategic partnerships in scaling adoption for emerging technologies like AI. While the initial surge in user numbers driven by free access is expected, the subsequent ability to convert a significant portion of these users into paying customers is the true measure of success. The substantial increase in revenue despite a decline in downloads suggests that, even in a price-sensitive market like India, a well-executed free trial can cultivate a habit that users are eventually willing to pay for. This highlights the importance of user experience and perceived value during the trial period. For AI companies eyeing global expansion, particularly in high-growth markets, Perplexity’s journey provides valuable lessons in navigating the delicate balance between rapid user acquisition and long-term monetization. The findings suggest that focusing on engagement and delivering tangible value during the free phase is paramount to securing future revenue streams, even if it means initially trading immediate profits for market penetration and user habituation.
