Mobile Tariffs Hike: Telecom Operators Brace for 15% Tariff Hike in June 2026 After 2 Years; Jio IPO To Boost Sector Valuation, Says Analyst Report
The report projects a hike of 10-20 per cent in mobile tariff by Jio to push its valuation closer to Bharti Airtel, and offer investors a double-digit internal rate of return. Debt-ridden telecom firm Vodafone Idea will need to increase the mobile services rates by 45 per cent between FY27 and FY30 to meet its statutory dues obligation, the report said.
Mumbai, January 9: India’s major telecom operators are projected to implement a 15% increase in mobile tariffs in June 2026, marking the first significant price correction in two years. According to a new industry analysis from Jefferies, the anticipated hike coincides with the potential initial public offering (IPO) of Reliance Jio, a move expected to recalibrate sector valuations and accelerate revenue growth across the industry.
Analysts Akshat Agarwal and Ayush Bansal of Jefferies suggest that the timing of the hike aligns with historical industry cycles. The report anticipates that the price adjustment will more than double the sector’s revenue growth rate, jumping from an estimated 7% in fiscal year 2026 to 16% by 2027. Telecom Tariff Plan Hike: Why India’s Telecom Giants Jio, Airtel and Vodafone Idea Are Raising Tariffs; Know ARPU Targets and Other Details.
The primary driver for this shift is the need to improve Average Revenue Per User (ARPU). While increasing data consumption and a shift toward postpaid plans have provided organic growth, analysts believe headline tariff hikes are necessary to sustain long-term financial health.
Jio IPO to Set New Valuation Benchmarks
A pivotal factor in the sector's outlook is the expected IPO of Reliance Jio in the first half of 2026. To ensure a competitive valuation and offer investors attractive returns, Jio is projected to lead the price adjustments with a 10% to 20% increase. Telecom Tariff Plan Hike: Why India’s Telecom Giants Jio, Airtel and Vodafone Idea Are Raising Tariffs; Know ARPU Targets and Other Details.
This strategy aims to narrow the valuation gap between Jio and its primary competitor, Bharti Airtel, while maintaining a healthy 14% year-on-year growth in ARPU for the 2027 fiscal year.
Financial Pressures on Vodafone Idea
While the industry broadly anticipates higher margins, Vodafone Idea (VIL) remains in a more precarious position. Despite a potential five-year government moratorium on Adjusted Gross Revenue (AGR) payments, VIL faces a steep uphill climb.
The report indicates that VIL would require a cumulative tariff hike of approximately 45% between 2027 and 2030 just to service its statutory obligations. The company currently owes the government roughly ₹87,695 crore in frozen AGR dues, with repayments scheduled to begin in the 2031-32 fiscal year.
Shift from Infrastructure to Profitability
As the aggressive rollout of 5G networks nears completion, telecom companies are shifting their focus from capital expenditure (capex) to margin expansion.
- Bharti Airtel: Capex intensity is expected to moderate to roughly 20-21% of sales.
- Reliance Jio: Cash capex is projected to drop significantly from 36% in FY25 to just 15% by FY27.
While these shifts favor corporate balance sheets, analysts warned that subscriber growth may remain "muted" in the short term as consumers adjust to the higher cost of mobile services.
(The above story first appeared on LatestLY on Jan 09, 2026 10:39 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).