Mobile tariffs likely to rise 15% in June after two-year gap: Report

Mobile tariffs in India are likely to rise by around 15 per cent in June after a gap of nearly two years, a move that could more than double the sector’s revenue growth rate in FY27, according to an analyst report cited by PTI.

A report by Jefferies equity analyst Akshat Agarwal and equity associate Ayush Bansal stated that a proposed initial public offering of Jio in the first half of 2026 is expected to support an increase in mobile services rates and improve valuations across the telecom sector.

The analysts informed that mobile tariffs are expected to rise by 15 per cent in June 2026, in line with past trends, two years after the previous round of tariff hikes. The report stated that rising data penetration, higher postpaid adoption and increasing data usage, along with headline tariff increases, are driving growth in mobile average revenue per user in India.

According to the report, sector revenue growth is expected to accelerate to 16 per cent year-on-year in FY27, compared with an estimated 7 per cent growth in FY26. The analysts modelled a 15 per cent headline tariff hike in June 2026, which they expect to support a 14 per cent year-on-year increase in ARPU in FY27. Subscriber additions are expected to remain muted due to the impact of higher tariffs, the report said.

The report projected that a 10–20 per cent tariff hike by Jio could push its valuation closer to that of Bharti Airtel and deliver a double-digit internal rate of return for investors.

For Vodafone Idea, the report stated that the debt-laden telecom operator would need to raise mobile service rates by around 45 per cent between FY27 and FY30 to meet its statutory dues obligations. The government has frozen Vodafone Idea’s adjusted gross revenue dues at ₹87,695 crore, which the company is required to begin repaying from the 2031–32 financial year and clear by 2040–41.

The analysts stated that a reported government plan to offer a five-year moratorium on AGR payments would result in a 35–85 per cent reduction in Vodafone Idea’s outflows towards government dues over FY26–30. However, they added that the company would still require a cumulative tariff hike of 45 per cent over FY27–30 to service these payments, along with raising additional debt or equity to fund network investments.

The report further stated that telecom operators are expected to see margin improvements due to lower capital expenditure requirements. The analysts informed that most 5G network roll-outs are now largely complete, with sector capital expenditure already moderating from FY25 levels and expected to remain moderate in FY26 and FY27.

According to the report, Bharti Airtel’s capex intensity is expected to remain at 20–21 per cent of sales in FY26–27, compared with 22–26 per cent in FY24–25. For Jio, cash capex intensity is expected to decline sharply from 36 per cent of sales in FY25 to 15 per cent by FY27, the analysts said.