Telcos likely to hike tariffs by Nov-Dec as monetisation push gains steam: Analysts

Analysts attribute the industry’s newfound pricing power to the shift in strategic priorities since Jio’s disruptive entry and the Supreme Court's AGR ruling in 2019.

Indian telecom operators are likely to hike mobile tariffs by another 10–20 percent by the end of 2025, marking what could be the fourth major hike in six years, as they sharpen their focus on monetisation amid mounting capital needs and regulatory tailwinds, analysts said.

This anticipated move follows the government’s approval of Vodafone Idea’s (Vi) request to convert Rs 36,950 crore worth of spectrum dues into equity, raising its stake in the struggling telco from 22.6 percent to 49 percent.

“We anticipate a tariff hike in November-December 2025, in line with ongoing tariff repair efforts across the industry. This move could serve as a key catalyst and enhance revenue visibility for the sector. We expect mid-to-high teen revenue growth for leading telecom companies - Bharti Airtel & Reliance Jio for 2025-27 led by strong ARPU growth & steady subscriber additions,” brokerage Bernstein said in its report on April 16.

Moneycontrol has seen a copy of the report.

Analysts said Vodafone Idea urgently needs a price hike to fund investments in 4G expansion and a delayed 5G rollout, while Bharti Airtel also seeks better returns on capital.

“Government recently converted spectrum dues into equity in Vodafone Idea, increasing its stake from 22.6 percent to 48.99 percent. This move is part of the broader telecom reforms announced in September 2021, aimed at strengthening sector viability. The equity conversion signals the government's commitment to preserve a three-player market structure & increases the probability of price discipline & future tariff hike,” analysts at Bernstein said.

In Vi’s Q3FY25 earnings call, CEO Akshaya Moondra echoed the urgency: “...in a normal situation, a 12-month period is ideal to kind of make any changes on tariffs. But given where the industry is today, a faster tariff change and the need of the hour is probably a possibility.”

In a separate report, Morgan Stanley said the equity conversion supports the market’s expectation of future tariff hikes.

Despite previous price hikes, Vi’s operational recovery remains sluggish, hindered by ongoing subscriber losses—a trend it hopes to reverse through continued investment and the 5G launch.

“We believe stabilisation of Vi’s subscriber base, along with further relief measures from the government, remains imperative for Vi’s long-term survival,” said Motilal Oswal.

The last tariff hike—up to 25 percent—came in July 2024, ending a two-year freeze. Since December 2019, telecom tariffs have climbed at a 12–15 percent CAGR through successive hikes in 2019, 2021, and 2024.

“We expect a 15 percent tariff hike in December-25, followed by annual hikes in 2026–33, enabling 10 percent tariff CAGR. VI’s capex should help it stabilize user decline in 2HFY26,” brokerage Ambit noted.

Analysts attribute the industry’s newfound pricing power to the shift in strategic priorities since Jio’s disruptive entry and the Supreme Court's AGR ruling in 2019.

“Jio took the lead in hiking tariffs immediately after the 2024 spectrum auctions, followed by others. We think this signals a shift in the industry’s focus to monetization vs prior land-grab focus,” Ambit said.

The government, too, has shown support, having condoned the July 2024 hikes and reiterating in January 2025 that India’s telecom rates remain among the lowest globally.

“We remain convinced that telcos will now be able to take price hikes more regularly, albeit lower in magnitude vs 2019–25. This period of tariff reset will enable India's telecom spends to reach pre-Jio (FY16) 1.3 percent of GDP,” Ambit added.

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