Airtel's Stealth Price Rise Signals Broader Telecom Hike Ahead

Bharti Airtel scrapped its ₹299 entry-level prepaid plan last week, along with four other budget packs. The move pushes subscribers toward a ₹349 tier that costs 16.7% more for daily data. Analysts see it as a preview of a bigger industry-wide tariff increase, one they had expected in December 2026.

IIFL Securities wrote in a 12 August note that Airtel had essentially pulled forward that expected hike on select plans. "We are not assuming that this tariff tweak is over and above the December 2026 expected tariff hike," the analysts said. The incremental benefit, they estimated, would be limited to four months of FY27, implying an Arpu uptick of ₹4.

Average revenue per user is a direct measure of per-subscriber income. Airtel reported monthly Arpu of ₹264 at the end of the June quarter. Vodafone Idea's stood at ₹177, and Reliance Jio's at ₹215.8. Airtel chairman Sunil Bharti Mittal said in March he remained "very hopeful" the company would reach ₹300 Arpu, with an ultimate goal of ₹350.

By killing the ₹299 plan, which offered 1 GB of daily data for 28 days, Airtel is funnelling subscribers into the ₹349 pack. That plan provides 1.5 GB of daily data and unlimited 5G over the same period. Analysts at Morgan Stanley called it "a focused attempt toward higher monetization while capitalizing on customer preferences for higher-data plans." They estimated the move could boost Airtel's Arpu by ₹8-12 on a gross basis.

JM Financial said if just 10% of Airtel's users upgraded to the ₹349 tier, the operator's Arpu would rise 2%. "It must be viewed as plan modifications undertaken by telcos to push subs to upgrade to higher GB and higher Arpu plans," they wrote, adding that a broader, across-the-board hike is overdue.

Airtel's domestic mobile user base stood at 376.5 million at the end of June, out of 492 million total subscribers. Analysts estimate 20% to 30% of those Indian mobile customers were on plans priced below ₹349.

Vodafone Idea now faces a hard choice. If it matches Airtel's price adjustments and 15% of its subscribers upgrade, IIFL estimated its Arpu could increase by ₹7-8, or about 4%. That would lift Vodafone Idea's FY27 Ebitda by 2% and its overall valuation by 3%. Some analysts said the cash-strapped carrier might instead use Airtel's move as a chance to migrate subscribers from secondary SIM cards to primary ones, holding prices steady to grab market share.

The industry has been here before. Last August, Reliance Jio removed its entry-level ₹249 plan from online platforms, a move Airtel and Vodafone Idea matched. In July 2024, operators implemented their first major tariff hikes in over two years, led by Jio's 12% to 25% increases across plans.

For now, Jio's entry-level plan sits at ₹299 with 1.5 GB of daily data for 28 days. Vodafone Idea's comparable plan is also ₹299 but offers only 1 GB per day. Jio's tariffs are generally priced at a discount to Airtel's and Vodafone Idea's. Historically, a single-operator price change triggers swift follow-up moves across the industry.

IIFL said the current tweak is an advancement of the next round of tariff hikes expected in December 2026. The timing of that broader increase, and whether Vodafone Idea can afford to wait, will determine how much revenue the industry can capture.