Indian Telecom Providers Likely to Increase Tariffs by December 2025
Indian consumers may soon face increased costs for telecommunications services as major operators like Bharti Airtel, Reliance Jio, and Vodafone Idea (Vi) are expected to implement periodic tariff hikes by the end of the year. This move aligns with their recent efforts to enhance revenue visibility amid a consolidating market. Analysts predict that Airtel and Jio will strengthen their market positions, potentially capturing a larger share as they navigate these changes.
Anticipated Tariff Increases
According to a report by global brokerage firm Bernstein, Indian telecom providers could raise their tariffs by 10 to 20 percent by December 2025. This would mark the fourth significant price increase in the past six years, with the latest hike occurring in July 2024, when companies raised their rates by up to 25 percent. The anticipated increases are largely driven by the growing capital requirements of telecom companies as they enhance their 4G services and expand into 5G technologies. Bernstein’s analysis suggests that the upcoming tariff adjustments will be a crucial factor in improving revenue visibility for the sector.
The report indicates that the industry is in a phase of “tariff repair,” which is expected to catalyze revenue growth. Bernstein forecasts mid to high-teen revenue growth for both Airtel and Jio from 2025 to 2027, attributing this to steady subscriber additions and an increase in Average Revenue per User (ARPU). The focus for these operators is shifting from merely acquiring new customers to maximizing revenue from their existing user base.
Vodafone Idea’s Financial Challenges
Vodafone Idea is currently navigating a challenging financial landscape. However, some of its difficulties have been alleviated following a government decision to convert the company’s spectrum dues into equity shares. This move has increased the government’s stake in Vi from 22.6 percent to 48.99 percent. The equity conversion is seen as a sign of the government’s commitment to maintaining a three-player market structure, which could enhance price discipline and support future tariff hikes.
Despite these adjustments, Vi remains in a precarious position. The company is working to stabilize its user base and improve its financial health. Analysts believe that the capital expenditure associated with the equity conversion may help Vi regain its footing in the competitive telecom market.
Future Projections for Tariff Hikes
Bernstein’s report anticipates a 15 percent tariff hike in December 2025, with additional annual increases expected from 2026 through 2033. While these hikes are likely to become more frequent, their scale may be less dramatic compared to the increases seen between 2019 and 2025. The anticipated tariff adjustments are projected to enable telecom operators to achieve a compound annual growth rate (CAGR) of 10 percent in tariffs.
As the telecom sector evolves, these changes could significantly impact consumers and the overall market landscape. The ongoing adjustments in pricing strategies reflect the industry’s response to the increasing demands of technology and infrastructure development, particularly with the rollout of advanced services like 5G. As operators adapt to these challenges, consumers may need to prepare for higher costs in the near future.
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