A year after the last major pricing revision, indirect tariff hikes have returned to the Indian telecom market, driven by Bharti Airtel. The Sunil Bharti Mittal-led carrier has removed its entry-level ₹299 monthly prepaid plan that offered 1 GB of data per day. To get a daily data allowance for 28 days, subscribers must now upgrade to the ₹349 plan, marking a ₹50 (16.7%) increase for an offering that includes 1.5GB of daily data and unlimited 5G access.
Separately, Airtel also removed its ₹319 (30-day), ₹579, ₹619, and ₹649 prepaid plans.
The 17% indirect tariff hike comes at a time when analysts had estimated that the only way for the telecom industry to improve average revenue per user (Arpu) - a key telecom metric - would be to increase tariff plans at a regular interval.
Industry analysts and company insiders attribute Airtel's move primarily to shifting consumer habits, with users increasingly migrating to higher-data plans. The hike also aligns with Airtel’s ongoing push to restructure tariffs to sustain average revenue per user (Arpu) and boost its return on capital employed (RoCE). In its FY26 annual report, the company highlighted lingering challenges in monetizing its 5G network.
“Airtel’s withdrawal of the ₹299 and ₹319 plans is its first significant move in the current cycle to raise prepaid Arpu. It is not a conventional tariff hike because the ₹349 plan offers more data, but it forces users into a higher minimum spend,” said Parag Kar, an independent telecom analyst. “Removing the ₹319 monthly plan is particularly saying that users who want the same 1.5 GB per day must now pay ₹349 for only 28 days.”
“This seems a well-thought-out strategy from Airtel. Given the increase in data usage, they would have seen this as an opportunity to upgrade the subscriber base and grow revenue,” said Faisal Kawoosa, chief analyst at technology consultancy firm Techarc.
Will others follow?
According to Kawoosa, investors will see this as a positive move by the telecom operator. He said competitors could follow, given that the sector is looking to improve its profitability and return on investments.
Kar also said rivals may eventually follow suit by withdrawing their own lower-priced plans to drive Arpu higher. If they don’t, Airtel risks losing price-sensitive subscribers to Vodafone Idea or Jio. Historically, however, pricing interventions by one telecom operator tend to prompt quick follow-up moves from competitors. The impact on subscriber churn will now be watched closely, Kar said.
In a like-to-like comparison, Jio currently has an entry-level plan of ₹299 plan, in which it offers 1.5 GB data per day for 28 days. Vodafone Idea has an entry-level plan of ₹299, in which it offers 1 GB per day data for 28 days, according to their websites.
Queries emailed to Bharti Airtel, Reliance Jio and Vodafone Idea were yet to elicit a response at the time of publishing.
Familiar playbook
This isn't the first time in recent months that an operator has quietly phased out a budget pack. Last August, Reliance Jio removed its entry-level ₹249 plan (1GB daily data) from online platforms, a move that was subsequently matched by Bharti Airtel and Vodafone Idea.
In July 2024, telecom operators implemented their first major tariff hikes in over two years, led by Reliance Jio's 12% to 25% price increase across plans. Over the past year, however, operators have taken opposing views on further price increases. While Airtel and Vodafone Idea pushed for another round of hikes, Jio ruled out immediate headline price increases, expressing confidence that rising 5G adoption would organically drive its Arpu growth.
Airtel’s leadership, however, has maintained a clear target for monetization. In March, Bharti Airtel chairman Sunil Bharti Mittal said he remained very hopeful that the company would get to ₹300 Arpu, with an ultimate goal of ₹350. "An Arpu of ₹350 would be the most appropriate Arpu in today's timeframe to have a sustainable, solid, financially viable telecom company,” Mittal told analysts, adding that the company would keep the low-end plans affordable for all its customers, given India is a price-sensitive market. However, Airtel believes there is scope for upselling and restructuring its data packs at the mid-to-upper end, he added.
Meanwhile, analysts expect a full-scale pricing revision to take a few more months. In a report, BofA Securities said it expects the next headline tariff hike around March or April 2027, following state elections scheduled for early 2027. Noting that the 2024 hikes were announced shortly after national elections, the brokerage added that "any visibility on tariff hikes would likely act as a catalyst for telco stock prices”.
As of June-end, Jio had 533 million subscribers, including 285 million 5G users. Bharti Airtel’s subscribers in India were at 492 million, including 376.5 million mobile subscribers. Vodafone Idea had 193.1 million subscriber base at the end of June.
In the June quarter (Q1), Airtel’s Arpu rose 2.7% to ₹264 from ₹257 in the previous quarter. In contrast, Reliance Jio’s Arpu saw a marginal increase to ₹215.6 from ₹214. Vodafone Idea’s Arpu grew 1.7% to ₹177 (up from ₹174), supported by network upgrades, 2G-to-4G/5G upgrades, and extra billing days. For comparison, as of June last year, Jio’s Arpu stood at ₹208.8, while Airtel and Vodafone Idea reported ₹250 and ₹165, respectively.