The two telecom companies with the most subscribers in India, Reliance Jio and Bharti Airtel, have raised minimum rates by eliminating their entry-level 1 GB/day prepaid plans for new users.
With increases of up to 15% anticipated this year, industry executives and analysts think this action may pave the way for additional tariff increases.
Jio and Airtel Scrap 1GB-Per-Day Plans, Raise Minimum Tariffs for New Users
A senior industry executive explained, “The demand for 1 GB plans has been falling ever since 5G services were introduced, as consumers end up using more data and upgrading to larger plans.”
Jio eliminated its ₹249 plan (1 GB/day, 28-day validity) from third-party recharge platforms, its website, and the MyJio app on Tuesday.
Jio Stores still sell the ₹249 plan, but new customers cannot use it.
With 1.5 GB per day, Jio’s new entry-level plan for new customers is now available for ₹299 per month.
According to a senior executive, Airtel will likewise adopt Jio’s strategy.
Airtel’s entry-level plan, which offered less data value at a higher cost, now starts at ₹279 per month for 1.5 GB per day instead of ₹249 for 1 GB per day.
Due to its need to improve its weak financials and increase average revenue per user (Arpu), Vodafone Idea (Vi) is also anticipated to follow this trend.
Analysts note Vi is under pressure to strengthen its performance given its debt burden.
Analysts Say Debt Pressures Push Vi to Improve Performance
Vinish Bawa, head of telecommunications at PwC India, said, “Discontinuation of entry-level prepaid packs and the shift to higher daily data packs reflect a calibrated strategy to raise the floor on consumer spends. This nudges subscribers towards higher Arpus while keeping data-rich packs attractive.”
Ankit Jain, analyst at Icra, added, “Recalibrating tariff plans is one way to lift Arpus, but the bigger impact will come when headline tariffs rise. Higher gigabyte plans at higher tariffs will add directly to telecom companies’ (telcos’) bottom lines.”
Without changing validity periods or overall data volumes, industry observers anticipate that tariff slab restructuring will result in another round of hikes this year, with headline tariff increases of 10–15% likely.
All three private carriers raised their prices by 10–21% in 2024 as a result of the most recent significant tariff hikes. This helped Arpus but also caused subscriber churn, with some customers switching to state-run Bharat Sanchar Nigam.
Akshaya Moondra, Vi’s departing CEO, declared on Monday that the company will discontinue its ₹299 plan (1.5 GB/day, 5G data) in Mumbai and plans to do the same in other areas.
This is interpreted by analysts as a probable move toward higher-tariff, 2 GB-per-day plans.
Icra’s Jain said, “Tariffs are expected to go up within this financial year. The key question is how the hikes are rolled out.”
PwC’s Bawa added, “With another round of tariff revisions expected by end-2025, following the mid-2024 hikes, the industry is clearly aligning to push Arpus towards sustainable levels. While this strengthens revenue visibility for telcos, affordability and customer value perception will remain key factors in balancing growth with inclusivity in India’s highly price-sensitive market.”
Given that voice and data allowances are among the lowest in the world, telecom companies have long maintained that India’s current tariff structures are unsustainable.
In numerous investor calls, Airtel Vice-Chairman Gopal Vittal has insisted that the current tariff structures and levels are unsustainable in the long run.
