Telecom major Jio on Thursday announced an increase in tariff rates in the range of 12-27 per cent across plans, a day after the curtains were drawn on the spectrum auction which drew very few bids.

Analysts are now expecting Bharti Airtel and Vodafone Idea to follow suit as mobile
mobile plans turn costly to consumers.

Jio is India’s largest telecom carrier by subscriber count, and Vodafone Idea and Bharti Airtel have not raised tariffs since 2021, according to Reuters.

Jio has hiked the tariffs across its 28-day validity plans: the ₹239 pack to ₹299; the ₹299 pack to ₹349; the ₹349 pack to ₹399; and the ₹399 pack to ₹499.

Annual plans such as the ₹1559 and ₹2999 packs will now cost ₹1899 and ₹3599, respectively.

For postpaid users, the ₹299 pack will cost ₹349; and ₹399 pack will rise to ₹449.

The two-month and 3-month plans have also seen a rise in tariff.

The new tariff for Jio users will be effective from July 3.

“The introduction of new plans is a step in the direction of furthering industry innovation and driving sustainable growth through investments in 5G and AI technology,” said Akash Ambani, chairman, Reliance Jio Infocomm Limited.

Analysts at IIFL Securities, JP Morgan, and Kotak Institutional Equities all highlighted the anticipated shift towards price increases even before the auction concluded.

Reports suggest these hikes could be rolled out as early as the coming fiscal year, with JP Morgan forecasting an average increase of 25 per cent spread over the second and third quarters.

The sector needs another round of tariff hikes which along with 2G to 4G migration would help to drive an increase in ARPU and return ratios, analysts said.

Bharti Airtel currently leads the industry with an ARPU of ₹209 in the March quarter, while Jio and VIL lag at ₹182 and ₹146 respectively.

Bharti Airtel’s managing director Gopal Vittal during the Q4 earnings call on May 15 raised the pitch for hikes, saying that “substantial tariff repair” was needed across the industry as the current levels were “absurdly low”.

“We have been saying, and some of our competitors have also been mentioning, that some of the price recovery has to happen over some time in the form of expanding the ‘higher pay more for using more’, which has gone away from the market over the last few years,” Vodafone Idea CEO Akshaya Moondra said on May 17, adding that tariff correction is critical for telcos to make reasonable returns.