“The price protection guarantee till September 2027, in a way, signals that a tariff hike is likely in the next six months — ₹46 per month ARPU (average revenue per user) hike based on ₹50 per-cycle increase — if the Jio Prime member has to make the most out of the membership upfront cost of ₹300,” analysts at Motilal Oswal Financial Services said in a note.
“Alternatively, if the tariff hike is delayed beyond March 2027, the quantum of tariff hike has to be significantly higher than ₹50 per 28-day plan to justify the outgo on the Jio Prime membership,” they added.
Jio’s move follows No. 2 carrier Bharti Airtel discontinuing its 28-day, 1 GB-per-day entry-level plan (₹299 rupees) last week amid consistent commentary from management for correction in tariff architecture, where higher data-using customers should pay more. To be sure, Jio removed its ₹249 monthly plan from online channels nearly a year ago. This plan was similar to the ₹299 plan offered by Bharti.
The Jio Prime membership enables members to enjoy price guarantee on eligible plans by locking in today's prices for one year until September 5, 2027, irrespective of any tariff revision Jio makes during this period. However, the subscription fee of ₹300 per year works out to be ₹25 per month, thus raising the tariff of ₹299 plan to effectively ₹324, implying 8 per cent tariff hike.
According to analysts at Avendus Spark, tariff hike would be imminent, because once the Prime membership fee is collected, a tariff hike needs to come as soon as possible to make the fee worthwhile for Jio Prime customers. “This effectively means Jio is taking a mini-tariff hike this year, while the bigger tariff hike gets kicked down the road,” they said in a note.
The changes in entry-level tariff plans will equally intensify the pressure on No. 3 carrier Vodafone Idea (Vi) to make a move, experts added. “Vi’s options are interesting: it could either follow suit (5 per cent FY27 potential cash Ebitda upgrade), use the window until headline tariff hikes to gain subscriber market share — customers who use Vi as the secondary SIM could consider making it the primary SIM — or adopt a circle-by-circle strategy,” IIFL Capital analysts said in a note.
However, it could also signal a shift in how carriers approach tariff hikes, especially with Reliance Jio heading towards an initial public offering (IPO).
“Beyond the quantum and timing of the tariff hike, the ground reality has shifted in the industry with Jio challenging the status quo. Over the last six years, tariff hikes in the Indian wireless industry were announced only after the broad industry consensus was arrived on both timing and quantum of hike. However, Jio chose to come up with its own construct, resulting in just 5-7 per cent growth instead of following Bharti's footsteps to take 16 per cent hike in entry-level plan, suggesting that there is no industry consensus this time,” Avendus analysts noted.
They added that Jio would prefer a larger tariff hike only after its stock listing rather than beforehand. This makes the issue a simple disagreement between the top two telcos over timing rather than a fundamental difference on the source of growth.
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