The Indian telecom sector is witnessing some subtle changes, which make analysts believe that the much-awaited tariff hikes are on the horizon.
After Bharti removed select entry-level prepaid data plans across 28–60 day validity last week, Reliance’s Jio Telecom on Monday reintroduced the Jio Prime membership at a one-time fee of ₹300, which offers protection against any price hike till Sep’27 along with additional benefits. It retained its entry-level daily “unlimited” data plan at ₹299.
Motilal Oswal Financial Services (MOFSL) believes that Jio’s price protection guarantee till September 2027, in a way, signals that a tariff hike is likely in the next six months. “A ₹50 increase on entry-level smartphone plans is likely in the next six months, or if it gets delayed beyond Mar’27, the tariff hike quantum is likely to be materially higher than ₹50/28-day,” MOFSL estimated.
“After years of aggressive competition and ultra-cheap data, the focus on premiumisation is important because even moderate tariff increases or customer upgrades can significantly improve cash flows and profitability,” Gour added.
Stock-specific impact
Meanwhile, MOFSL sees subscriber churn among value-conscious Bharti Airtel to Jio or Vodafone Idea following a higher entry-level plan.
JM Financial has a ‘Buy’ call on Airtel with a target price of ₹2400, while MOFSL also reiterated its bullish views on both Airtel and Reliance Industries by maintaining ‘Buy’ ratings.
Gour said his top pick is Bharti Airtel, considering its strong ARPU profile, healthy competitive position, improving profitability and relatively strong balance sheet. “It appears best positioned to benefit from a structural improvement in telecom pricing.”
Reliance Jio would be his second preference. Its large subscriber base, 5G network and broader digital ecosystem provide significant long-term growth opportunities, particularly if industry-wide monetisation improves, he added.
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