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Indian private telecom operators such as Jio, Airtel, and Vodafone Idea are expected to increase prepaid and postpaid tariffs by up to 20%. The price hike will lead to a substantial increase in the bottom-line profits.
According to Morgan Stanley, customers are expected to pay a 16%-20% price hike on 4G and 5G plans in 2026. The brokerage company said this change would deliver strong ARPU growth to telecommunication firms in FY27.
Telcos have gradually terminated their cheaper plans or offset their advantages in OTT subscriptions by moving customers to higher-paying bundles. These moves have driven consumers to pay higher rates, increasing the average revenue per user. Industry analysts forecast that companies will raise tariffs again.
Increased tariffs would mean higher monthly mobile bills, especially for users who consume more data and families with many connections. Experts suggest the risk of losing customers is low because the market lacks cheaper alternatives.
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Bharti Airtel has been the largest beneficiary of the tariff increase, registering more pronounced revenue and EBITDA growth than struggling competitors, Morgan Stanley stated. Airtel, along with Jio and Vodafone Idea, has been the only player to increase prepaid tariffs three times since then.
The expected hikes also come amid heavy spending on 5G rollouts and spectrum payments. The results of heavy investment spending, combined with still-evolving returns from 5G investments, are making higher tariffs necessary to maintain the financial health and future growth of companies.
The last major increase in the Indian telco industry’s tariffs occurred in 2019, when prices rose by 15%-50%. This was followed by a 20% - 25% increase in 2021 and, subsequently, a further 10% - 20% increase the previous year.
Although a further 15% increase in FY26 was expected, the next round of increase will likely happen in 2026 due to 5G outlays.
