Indian telecom giants, including Reliance Jio, Bharti Airtel and Vodafone Idea, are expected to raise prepaid and postpaid tariffs by up to 20% in 2026.
India’s major private telecom operators, including Reliance Jio, Bharti Airtel, and Vodafone Idea, are poised to increase their prepaid and postpaid tariffs by up to 20% in 2026. This potential tariff hike, driven by a trend of periodic price adjustments, is expected to boost revenue for the telecom sector significantly.
Trend of Tariff Increases and Industry Predictions
Telecom companies in India have historically raised tariffs every two years, with the last increase occurring in July 2024. Based on this pattern, industry analysts predict that the next round of tariff hikes could take place in 2026. According to Morgan Stanley, the anticipated increase could range between 16% to 20%, covering both 4G and 5G plans. This adjustment would be applied to both prepaid and postpaid services, further strengthening the average revenue per user (ARPU) for telecom operators.
5G Access and Data Plans Likely to Become Costlier
In addition to the regular price hike, analysts foresee that the inclusion of 5G services could lead to higher charges. Telecom companies have been bundling 5G services with higher-priced data plans, and this trend may continue. These plans, which typically offer 2GB of daily data, could see price increases, making access to 5G network services more expensive for users.
Morgan Stanley’s forecast suggests that these tariff hikes could substantially drive ARPU growth for telecom companies, particularly in the financial year 2027 (F27). With the introduction of 5G and additional data offerings, telecom operators stand to increase both their top-line revenue and bottom-line profits.
Bharti Airtel’s Projected ARPU Growth
One of the most significant beneficiaries of this tariff hike would be Bharti Airtel. The telecom giant currently has an ARPU of Rs 256 at the end of Q2 FY26. A 20% tariff increase would push Airtel’s ARPU beyond Rs 300, strengthening its financial position. Morgan Stanley projects that Airtel could even cross Rs 400 in ARPU within the next five years, assuming no additional tariff hikes after 2026.
Airtel’s continued ability to increase ARPU without losing customers positions it as a key player in the Indian telecom market, particularly in light of the growing demand for 5G services.
Short-Term Subscriber Loss Likely, But Recovery Expected
While the tariff hike will likely lead to some short-term subscriber churn, particularly for Vodafone Idea, which has been losing customers, the effect is expected to be temporary. Historically, telecom operators have seen a reduction in their subscriber base immediately after tariff hikes, with consolidation occurring as customers adapt to new plans. However, this dip is typically followed by a recovery within two to three quarters, as customer loyalty and usage patterns stabilise.
Impact on the Telecom Sector
The upcoming tariff hike is expected to significantly benefit the telecom sector, helping companies improve their financial performance. As Bharti Airtel and Reliance Jio continue to strengthen their position, Vodafone Idea may face challenges in retaining its subscriber base. However, the overall impact of higher tariffs should have a positive effect on the sector’s revenue growth, particularly in the post-2026 period.
Conclusion: A Boost for the Telecom Sector in 2026 and Beyond
As telecom companies prepare for another round of price hikes in 2026, the Indian telecom sector is set to experience a boost in ARPU and overall revenues. While the hikes may lead to some short-term subscriber losses, the long-term effects of increased tariffs, especially with the growing rollout of 5G, will likely prove beneficial to telecom giants like Airtel and Jio.
