Jio, Airtel, and Vi eye a tariff reset by mid-year

The Indian telecommunication landscape is bracing for a major shift as the trio of Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) prepares to implement a 10–20% tariff hike by mid-2026. After nearly two years of relative price stability, this upward adjustment is becoming an operational necessity for telcos looking to bolster revenues, repair balance sheets, and increase returns from their massive investments in 5G infrastructure.

Jefferies models a headline hike of 15% in June, which is expected to translate into a healthy 14% growth in average revenue per user (ARPU) by the 2027 fiscal year. While subscriber additions may remain muted due to the price sensitivity of the Indian market post the tariff hike, Morgan Stanley anticipates even steeper adjustments of 16–20% across both 4G and 5G prepaid and postpaid tiers.

Historically, pricing actions in the telecom sector occur in two-year cycles, and the projected timeline aligns with this trend, potentially doubling the sector’s revenue growth rate to about 16-20% in FY27. Telecom service providers’ gross revenue in the September quarter of FY26 increased by 9.19% to a record ₹99,828 crore, according to sector regulator Trai.

Despite the constant tariffs, structural factors are already quietly pushing ARPUs of telcos higher in the country. The surge in data consumption, the migration of users toward postpaid plans, and deeper smartphone penetration have strengthened the bottom line.

The anticipated initial public offering of Reliance Jio in the first half of 2026 is expected to serve as a significant catalyst for the revaluation of telecom businesses. A substantial tariff hike by Jio would help narrow the valuation gap between Jio and Bharti Airtel, analysts said.

The stakes are notably higher for Vodafone Idea. The debt-strapped operator faces staggering statutory obligations, including reayment of AGR dues of ₹87,695 crore. Even with potential government moratoriums that could ease cash outflows by up to 85% between FY26 and FY30, analysts warn that Vi requires a cumulative tariff increase of 45% over the coming years just to service its liabilities and fund essential network upgrades. Consequently, while the market leaders are looking for growth, Vi is fighting for survival.

What do brokerages have to say

Brokerages currently tracking the sector report steady operational trends that provide the necessary cushion for these hikes. BoFA Securities expects stable quarterly revenue growth for both Airtel and Vi, driven by consistent subscriber additions and marginal ARPU improvements. Meanwhile, ICICI Securities highlights that while Jio may lead the pack through fixed wireless access growth, the overall environment has become increasingly favourable for price discovery with only three private players remaining. This consolidation has allowed operators to begin nudging customers toward premium tiers by phasing out low-end offerings and bundling benefits such as OTT subscriptions into higher-priced plans.

India’s ARPU which is lowest globally provides more scope for price hike. As capital expenditure intensity began cooling, following the completion of major 5G roll-outs, telecom players' focus is shifting toward profitability. For consumers, this transition will inevitably mean higher monthly bills, but for the telcos, it represents a critical step toward securing capital for the next stages of growth.