Jio's data tariff move strong signal for Bharti Airtel, Vodafone Idea

Jio's increase in entry-level data tariffs could push its FY26 revenue up by 4-5%. This move is expected to trigger similar tariff hikes by Airtel and Vodafone Idea, benefitting the entire sector.

Jio has discontinued its 1GB/day data plan of Rs 249 (28-day validity), making its 1.5GB/day plan (Rs 299) the entry-level data plan, with 17 per cent increase at entry level. Jio has a subscriber base of 498 million, (213 million are 5G). About 30-35 per cent of the base is affected. This could lead to a 4-5 per cent increase in Jio’s FY26 estimated revenue. Going by history, it could set off another round of tariff hikes by Bharti Airtel (Bharti) and Vodafone Idea (VIL).

 

Jio may be closer to a long awaited listing and both Airtel and VIL would be happy to raise tariffs. The reduction in competitive intensity with only three private operators, coupled with rising demand for data makes it apparent the market will absorb calibrated hikes and also push 5G adoption. Jio’s average revenue per user (ARPU) per month in the April-June quarter (Q1) of FY26 was Rs 210, against Bharti’s Rs 250. VIL lagged with ARPU at Rs 177. BSNL fell short with ARPU as low as Rs 40 in some circles and at a maximum of Rs 175 in others.

 

Jio remains unlisted even as it has the largest subscriber base. The two major listed operators, Bharti and VIL, present contrasting financial pictures and operational profiles. Bharti is financially sound, with fibre, 5G, soon-to-be launched satellite services and a strong overseas profile. VIL is struggling, mobile only and it has just launched 5G. The government has already carried out several "rescues" for the firm, and even that may not be enough unless the company can raise a lot of cash and persuade the government to carry out yet another rescue. 

 

Bharti posted a healthy show in Q1 of FY26, led by better performance in Airtel Africa (AAF) and India wireless, with 3 per cent quarter-on-quarter (QoQ) revenue growth and EBITDA uptick aided by higher ARPU — which rose to Rs 250 — and better margins. The consolidated capex normalised to Rs 8,200 crore, down 42 per cent QoQ, and 15 per cent year-on-year (YoY). Management reiterated that FY26 India capex (ex-Indus Towers) should further moderate from FY25 levels of Rs 30,000 crore. Consolidated net debt excluding leases declined by Rs 13,000 crore QoQ to Rs 1.26 trillion, driven by free cash flow (FCF) generation of Rs 14,300 crore (vs. Rs 9,700 crore QoQ).

 

The moderation in capex and potential tariff hikes could push significant FCF gains and the stock may see re-rating. There's been continued acceleration in Home broadband net adds. The group is looking to list Airtel Money (Africa mobile money) and Airtel Payments Bank and Nxtra (its data centre) in future.

 

VIL's Q1FY26 revenue at Rs 11,020 crore (up 5 per cent YoY; flat QoQ) was in line with expectations, and so was EBITDA at Rs 4,610 crore (up 10 per cent YoY; down 1 per cent QoQ). It saw an increase in 4G subscribers, and higher per-user data consumption as 4G rolled out and 5G launched. Capex declined to Rs 2,440 crore due to uncertainty around debt raising. This is against Rs 4,230 crore in Q4FY25. VIL’s ARPU rose 0.6 per cent QoQ, much lower than Bharti and Jio’s. Monthly subscriber loss has come down to 0.2 million loss per month vs average of 1.2 million in the previous eight quarters. It's aiming for Rs 5,000-6,000 crore of capex, contingent upon fund raise.