The Jio tariff hike everyone expected isn’t coming—yet

Jio and its closest rival Bharti Airtel Ltd recently removed their entry-level plans to bump up their average revenue per user (or Arpu, a key performance metric for telecom operators), triggering expectations that the telecom operators would increase tariffs towards the end of the year or in early 2026.

“We are nudging consumers to consume more and happily pay more, but no immediate plans for the tariff (hike)," said Anshuman Thakur, head of strategy at Reliance Jio Infocomm, during an earnings call with analysts.

In the September quarter, Jio’s monthly average revenue per user rose 1.2% to ₹211.4 from ₹208.8 at the end of June, with growth slowing due to promotional 5G offers, according to the company.

Following Jio’s decision to remove its entry-level pack, analysts had expected it to both raise tariffs and focus on premium services to close the gap with Bharti Airtel, which leads the industry in terms of Arpu ( ₹250 at the end of June). Airtel is yet to declare its September-quarter earnings.

“If Reliance were not to increase tariffs in the next few months, its [year-on-year] Arpu growth for the March quarter would likely be 4% (at say ₹214/subscriber)," J.P. Morgan analysts said in a note dated 19 October. “Investors continue to expect Jio to raise telecom tariffs ahead of the proposed IPO of Reliance Jio (likely by June 2026)."

Jio net added 8.3 million mobile subscribers during the September quarter, taking its subscriber base to 506.4 million. At the end of September, Jio had 234 million 5G subscribers, up from 213 million in the preceding June quarter. 5G now accounts for 50% of Jio’s total wireless traffic.

Leading tariff hikes

When telecom operators raised tariffs in July 2024 after a gap of over two years, it was Reliance Jio that took the lead with a 12–25% price hike.

But while Airtel and Vodafone Idea Ltd have been vocal about the need to hike tariffs to increase the return on capital employed (RoCE, a measure of profitability and efficiency), Jio has refrained from openly talking about increasing tariffs.

“We (the industry) are operating with the lowest Arpus and the lowest rate per gigabyte. Yet you have to make money," Bharti Airtel’s managing director and vice chairman Gopal Vittal said at an industry event earlier this month, adding that there was room for raising telecom tariffs.

In fact, Vittal had earlier called for a change in the telecom tariff structure, by reducing data allowances on some telecom packs and charging for more data.

“Though RIL (Reliance Industries) is non-committal on possible tariff hike, management indicated they have other levers like unlimited 5G slab increase, etc., to drive Arpu growth along with the accelerated roll out of FTTH (fiber-to-the-home)/FWA (fixed wireless access)," Antique Stock Broking analysts said in a note dated 19 October.

Jio’s broadband focus

Jio, during its earnings call last week, said it was looking to add more home broadband subscribers faster. It added more than 1 million new homes each month during the July-September quarter, taking its total fixed broadband connections to 23 million.

Jio has set a target of 100 million home broadband customers, with no specified timeline.

“The rate for connecting new homes has been increasing and the technology is working well," Thakur told analysts during the call. “A lot of these new connections are being done wirelessly, and therefore the implementation itself is simpler, faster, and we are expecting that we will be able to scale this up quite significantly from where we are today."

Jio is leveraging its unlicensed band radio technology—the 5G Air Fibre and fiber route—to provide home broadband internet.

Reliance Intelligence and Jio

In August, Reliance Industries chairman and managing director Mukesh Ambani launched Reliance Intelligence, the company’s artificial intelligence arm, and announced expanded partnerships with shareholders Google and Meta Platforms for AI applications and services.

On the role of Jio’s parent, Jio Platforms Ltd, in this arrangement, Thakur said, “Jio is going to develop its own products and it is going to work with Reliance Intelligence to bring its solutions to the market."

Jio Platforms houses the telecom and digital services business of Reliance Industries. Reliance Jio Infocomm is a subsidiary of Jio Platforms, accounting for most of its business.

Reliance Intelligence will develop and invest in creating AI products, Thakur explained, adding that this would require a lot of infrastructure and computing needs such as graphic processing units (GPUs).

“Reliance Intelligence is not looking to do its own LLMs (large language models) at this point in time, but (it is looking at) AI-based products and solutions using its own infrastructure, its own people, its own capabilities," Thakur said.

While Jio will have an open slate to work with companies such as OpenAI, Meta and Google, Reliance Intelligence will compete with these global tech giants, he said.

“This dual structure—RI (Reliance Intelligence) developing core AI capabilities and Jio leveraging them across its platforms—ensures lower incremental investment needs, stronger integration, and long-term cost efficiency, positioning Reliance to monetize enterprise AI workloads and India- specific digital services in the coming years," the Antique Stock Broking analysts said in their note.

Jio Platforms reported a 12.8% year-on-year growth in net profit to ₹7,375 crore for the September quarter. Revenue from operations rose 14.6% to ₹36,332 crore.