India telecom sector may see 12-15% tariff hike soon
A new report suggests India's telecom sector may see a 12-15% tariff hike in the next few months, impacting Airtel, Jio, and Vodafone Idea.
Mobile users in India may soon face higher monthly bills as the telecom industry prepares for a significant price jump. According to a recent report by Centrum Institutional Research, the sector is poised for a 12-15 per cent tariff hike within the next four to five months.
The report suggests that the pricing environment has become increasingly favourable for service providers following market consolidation. With the landscape now dominated by a "3+1" player structure, companies are finding more room to adjust their pricing models.
ARPU growth expected for major players
The upcoming price revisions are expected to boost the Average Revenue Per User (ARPU) for the industry's giants. Major operators, including Bharti Airtel, Reliance Jio, and Vodafone Idea Limited (VIL), are projected to see an ARPU increase of approximately 0.8 to 2.0 per cent quarter-on-quarter (QoQ) in Q2FY27.
Several factors are driving this anticipated revenue growth:
- The ongoing migration of users from 2G to 4G and 5G networks.
- A steady rise in postpaid subscriber additions.
- A higher number of days in the upcoming quarter.
- Robust data usage per customer driven by 4G/5G penetration.
Market Share Battle: Jio and Airtel vs VIL
The competitive landscape shows a clear divide in subscriber growth. While the market consolidates, Reliance Jio and Bharti Airtel are expected to continue gaining market share at the expense of Vodafone Idea.
The Centrum report provides specific projections for subscriber additions:
- Reliance Jio: Expected to add approximately 8 million subscribers QoQ, reaching a total of 541 million. Its ARPU is likely to grow by 1 per cent to Rs 218 per month.
- Bharti Airtel: Projected to add 3 million wireless subscribers QoQ, reaching 380 million. It is expected to maintain an industry-leading ARPU of Rs 269 per month.
- Vodafone Idea (VIL): Anticipated to add about 1.0 million customers QoQ, bringing its total to 194 million, with an ARPU of Rs 178 per month.
5G Expansion and Financial Moves
Network coverage remains a primary focus for the industry. Both Reliance Jio and Airtel have already achieved 5G coverage in more than 95 per cent of India's districts. Meanwhile, VIL is ramping up its presence, with its 5G network currently active in around 200 cities.
Financially, Vodafone Idea is navigating a critical period. The company is reportedly in active discussions with banks to secure a Rs 250 billion debt fundraise. This capital is essential for its broader Rs 450 billion capex program planned for the FY27E-29E period.
Other industry players are also seeing movement. Indus Towers is expected to see a revenue increase of 1.7 per cent due to rising co-locations, while Tata Communications is projected to grow its revenue by 1.6 per cent, supported by its expanding digital platform and data services.