According to a research by experts on Thursday, telecom operators are anticipated to raise mobile prices by 15% after about two years, which is predicted to more than quadruple the sector’s revenue growth rate in FY27.
Telecom Tariff Hike Outlook and Revenue Growth
According to Equity Analyst Akshat Agarwal and Equity Associate Ayush Bansal’s Jefferies report, “We expect mobile tariffs in India to rise by 15% in June 2026, two years after the last tariff hikes — in line with trends in the past,” and a proposed IPO of Jio in the first half of 2026 will boost the sector’s valuation. In addition to headline rate increases, rising data penetration, postpaid penetration, and rising data use are driving greater mobile ARPU (average revenue per user) in India, according to the research.
In contrast to our projection of 7% YoY in FY26, we anticipate sector revenue growth to increase to 16% YoY in FY27. We forecast a 15% headline rate rise in June 2026, which should support a robust 14% YoY ARPU growth in FY27, given the strong probability of tariff hikes in CY26. Because of the effect of tariff rises, we anticipate that subscriber additions will be rather limited,” the research said.
Impact of Tariff Increase on ARPU and Subscribers
📱 India Mobile Tariff Hike Highlights
- Expected Hike: ~15% mobile tariff increase
- Timeline: June 2026
- Last Hike: Nearly two years earlier
- ARPU Growth: Estimated 14% YoY in FY27
- Revenue Impact: Sector growth projected at 16% YoY
- Key Drivers: Data usage, postpaid penetration, tariff hikes
According to the report, Jio would raise its cell pricing by 10–20% in order to get its value closer to Bharti Airtel and provide investors with a double-digit internal rate of return. According to the research, debt-ridden telecom company Vodafone Idea would have to raise mobile service tariffs by 45% between FY27 and FY30 in order to satisfy its statutory dues requirement.
Jio Pricing Strategy and Vodafone Idea Challenges
The government has frozen Vodafone-Idea’s (VIL) AGR dues at Rs 87,695 crore, which the financially troubled corporation must begin paying in the 2031–32 fiscal year and settle by 2040–41. “VIL’s outflow toward government dues throughout FY26–30 would be reduced by 35–85% as a consequence of the government’s announced decision to grant a 5-year deferral on AGR payments.
To make these payments, VIL would still need a 45% cumulative tariff increase over FY27–30. In order to finance its network investments, it would also need to obtain debt or stock, according to the article. Analysts predict that telecoms’ margins will rise as a result of reduced capital expenditures.
AGR Dues Relief and Funding Requirements
📡 5G Rollout and Telecom Capex Trends
- 5G Status: Majority of rollouts nearing completion
- Capex Trend: Declining since FY25
- Outlook: Further reduction expected in FY26–FY27
- Airtel Capex: 20–21% of sales in FY26–27
- Jio Capex: Falling from 36% (FY25) to 15% (FY27)
- Margin Impact: Improved profitability expected
“We think that the majority of the 5G network rollouts are finished. Since FY25, sector capital expenditures have already begun to decline, and in FY2026–2027, this trend is probably going to continue.
“From FY24–25 levels of 22–26% of sales, we anticipate Bharti Airtel’s expenditure intensity to be reasonable at 20–21% of sales in FY26–27. We anticipate that Jio’s cash capital intensity would decrease from 36% of revenues in FY25 to 15% in FY27,” the research said.
Frequently asked questions
1. When can we anticipate an increase in mobile rates?
In June 2026, almost two years after the last increase, analysts predict that Indian telecom companies would increase mobile rates by almost 15%.
2. Why are telecom providers preparing to raise their rates?
The primary causes include increasing postpaid penetration, increasing ARPU (average revenue per user), growing data use, and the desire to boost sector profitability.
3. What effects would the tariff increase have on the telecom industry?
The increase is anticipated to increase industry revenue growth from an estimated 7% rise in FY26 to around 16% year-over-year in FY27.
4. What function does the suggested Jio IPO serve?
Jio’s planned initial public offering (IPO) in the first half of 2026 might boost industry valuations and encourage higher mobile service pricing.
5. What difficulties does Vodafone Idea encounter?
Despite anticipated government relief measures, Vodafone Idea may need a cumulative rate rise of almost 45% between FY27 and FY30 in order to pay statutory dues and finance network improvements.
In conclusion
As key 5G rollouts get closer to completion, the Indian telecom industry is about to enter a new growth phase propelled by anticipated rate rises, rising ARPU, and lowering capital expenditure. Potential Jio IPOs might boost investor confidence and values even further. While Jio and Bharti Airtel seem to be well-positioned to profit from these developments, Vodafone Idea is still under financial strain and will need substantial finance help and pricing rises in order to fulfill long-term commitments.
Disclaimer
This content is for informational purposes only and is based on analyst reports and publicly available information. It does not constitute financial, investment, or legal advice. Readers should consult certified professionals before making any investment or financial decisions
