Jio listing in spotlight as telecom players weigh tariff increases

India’s largest mobile operators are weighing a fresh round of headline tariff increases over the next two quarters, as Reliance Jio, Bharti Airtel and Vodafone Idea seek to bolster their return on investments ahead of a wave of capital spending, including on data centres. 

The tariff increases could come before or around the planned listing of Jio, industry executives and analysts said. Mobile tariff in India is among the lowest in the world despite the capital intensive nature of the industry.  Minor changes to some tariff plans may anyway continue to take place on the sidelines, they said. 

The average revenue per user (Arpu) of major telcom companies have been on the rise over the last one year without any major headline tariff changes as customers moved to more premium data plans. 

“The timing of the next tariff hike is being closely watched. If the Jio IPO happens in the Navratri period, the expectation is that a hike may be just before that,” said a senior industry executive who did not want to be named. 

“The call for tariff repair or correction of tariff architecture has been growing louder… any uptick in tariff adds to Arpu and therefore the market value of the telcos,” the person added, indicating a potential bump up for Jio’s IPO which is expected to be the largest ever, estimated to raise ₹37,700 crore. 

 

A second executive said that the timing of the next headline tariff change was being debated as both the top carriers — No 1 Reliance Jio and No 2 Bharti Airtel — recently made changes to their tariff plans with Jio relaunching its Prime membership with a one-time fee of ₹300 offering protection against any price change till September 2027.

 

This followed Airtel discontinuing the 28-day, 1 GB-per-day entry-level plans, moving up its entry level plan to ₹349 a month. Bharti Airtel’s top executives have consistently sought for correction in tariff architecture, where higher data-using customers should pay more.

 

The  No 3 player Vodafone Idea is yet to make any changes to its tariff plans or raise headline tariffs, even though the carrier’s non-executive chairman Kumar Mangalam Birla has reiterated the need for tariff corrections in several instances this year, including his latest speech to shareholders at the company’s annual general meeting on August 27.

 

“India's Arpu remains among the lowest globally, making periodic tariff rationalisation essential to ensure the industry's long-term sustainability and ability to earn reasonable returns on capital,” he had said, adding that continued investments in network expansion and next-generation technologies required financially healthy telecom ecosystem, which would be in the interest of customers as well.

 

Queries to Reliance Jio, Bharti Airtel and Vodafone Idea did not elicit a response as of Thursday evening.

 

Tariff increases has become critical for carriers that have plans to undertake large scale capex plans over the next few years. According to HSBC Global Investment Research’s note dated September 7, Airtel is expected to make USD 11.2 billion investments between FY27 and FY29, the same period during which No 3 carrier Vi is planning to invest USD 4.7 billion.

 

Between FY21 and FY26, Airtel has spent USD 17 billion while Vi has spent USD 3.4 billion.

 

At the AI Summit in February this year, Reliance Industries Ltd (RIL) announced a landmark capital expenditure plan of ₹10 lakh crore (about $110 billion) over the next seven years to build AI-ready computing infrastructure, renewable energy capacity and related hardware but did not specify how much of this will be undertaken by Jio.

 

Jio's capex for FY 26 was ₹34,184 crore.

 

Brokerages have, however, maintained that the next headline tariff increase was imminent, but more likely to happen after the Jio IPO. HSBC expects tariff hikes to take place in the January to March quarter of 2027, the fourth quarter of the ongoing financial year, pushed further down the road from the earlier expected timeline of the October to December quarter in 2026.

 

Motilal Oswal said last month that a tariff hike was likely between September to February, and if it were to be delayed beyond March 2027, the quantum of tariff hike has to be significantly higher. Morgan Stanley Research is pegging the next tariff hike to be about 16-20 per cent within the ongoing financial year, in line with the previous rounds of tariff hikes - in 2019, 2021 and 2024 - that have been between 10 per cent and 25 per cent. IIFL Capital is also expecting a tariff hike in late 2026. 

Tariff revisions over time 

• Dec ’19: Headline tariffs raised 15-40% across plans, 1st since Jio’s entry in 2016 with free voice calls, 1GB/day data plans
• Dec ’21: Entry-level tariffs hiked 20% across plans, raising the base
• Jun ’24: Headline tariffs up 10-25% across plans
• Aug ’26: Airtel nixes some entry-level tariff plans; no headline tariff hike