India’s telecom sector may be heading for a fresh round of price increases, as improving fundamentals and a potential major listing are expected to reshape revenue growth and valuations over the next few years.
Analysts say telecom operators are likely to raise mobile tariffs by 15% in June 2026, nearly 2 years after the last hike. This move could more than double the sector’s revenue growth rate in FY27, according to an analyst report released on Thursday. The report also notes that a proposed initial public offering of Reliance Jio in the first half of 2026 could significantly boost sector valuations and support higher mobile service rates.
“We expect mobile tariffs in India to rise by 15 per cent in June 2026, two years after the last tariff hikes — in line with trends in the past,” the report said.
The analysts expect sector revenue growth to rise to 16% YoY in FY27, compared with an estimated 7% YoY growth in FY26. With a high likelihood of tariff hikes in CY26, they have factored in a 15% headline increase in June 2026, supporting 14% YoY growth in average revenue per user in FY27. Subscriber additions, however, are expected to remain muted due to higher prices.
Rising data penetration, higher postpaid adoption, and increasing data usage are already pushing ARPU levels higher, even before new tariff hikes. The report adds that a 10–20% tariff increase by Jio could narrow its valuation gap with Bharti Airtel and offer investors a double-digit internal rate of return.
For Vodafone Idea, the situation remains more challenging. The debt-laden telco would need to raise mobile service rates by 45% between FY27 and FY30 to meet statutory obligations. The government has frozen its AGR dues at Rs 87,695 crore, with repayments starting in FY32 and continuing until FY41.
“The govt’s reported plan to offer a 5-year moratorium on AGR payments would result in a 35-85 per cent reduction to VIL’s outflow toward government dues over FY26-30. However, VIL would still need a cumulative tariff hike of 45 per cent over FY27-30 to service these payments. Moreover, it would have to raise debt/equity to fund its network investments,” the report said.
Analysts also expect margin expansion as capital expenditure eases. Most 5G roll-outs are now complete, with sector capex moderating from FY25 and expected to stay moderate in FY26–27. Bharti Airtel’s capex intensity is projected at 20–21% of sales in FY26–27, down from 22–26% in FY24–25, while Jio’s cash capex intensity may fall from 36% in FY25 to 15% in FY27.
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