Telecom operators adopt distinct pricing strategies as indirect cost increases loom for users

Telecom users across major networks may face higher effective costs in the near term, as operators pursue distinct pricing and packaging strategies rather than moving in lockstep, according to industry analysts.

Reliance Jio has introduced a ₹300 Prime membership. According to expert commentary cited in reports, this move suggests a tariff hike may follow within the next two to four months, with the inflection point for customer benefit noted at six months. Meanwhile, Jio has also announced tariff certainty with its Prime subscription lasting until September 2027.

On the other hand, Bharti Airtel has adopted a direct approach by removing several popular plans while retaining base packages priced at ₹199 and ₹219. According to research from Goldman Sachs, this strategy delivers an immediate payoff, resulting in an estimated wireless Average Revenue Per User (ARPU) increase of ₹16 to ₹19 per month and an EBITDA impact of 6 to 8 percent.

Brokerages such as Motilal Oswal Financial Services maintain that a broader tariff revision remains inevitable by the end of the year, while market speculation links some of these indirect moves to Jio's upcoming IPO.

Telecom operators have consistently highlighted the issue of low ARPUs. Mahesh Uppal, Director at CommFirst India, noted that companies require larger investments to adopt newer technologies. However, he cautioned that increasing tariffs beyond a certain threshold can be counterproductive.

"If demand is affected by a price rise, you have to lower prices. Traffic lost today cannot be regained tomorrow. Demand for telecom services is inelastic only up to a point. Companies understand this," Uppal stated.

Amid these developments, Vodafone Idea (Vi) continues to operate largely in the background. Sumeysh Srivastava, Partner at The Quantum Hub, observed that these market dynamics create tactical space for Vi.

"For Vi, these moves create some tactical space. Competitive pricing could help it consolidate gains, but with ARPU still below that of its peers and significant network investment requirements, Vi will need to improve monetisation. The sector may therefore see operators pursuing different pricing strategies in the near term, rather than moving in lockstep," Srivastava said.

Additionally, leadership changes have emerged within the broader ecosystem, with Sunil Mittal stepping down as the chief of Airtel Payments Bank and Shabnam Sinha stepping in to succeed him.

"The telecom sector is currently navigating a delicate balance between capital expenditure requirements for emerging technologies and consumer price sensitivity. While operators are finding innovative ways to improve ARPU through plan restructuring and membership models, managing demand elasticity remains critical. As companies prepare for potential broader tariff revisions, distinct operational strategies will dictate market positioning and monetization capability in a competitive landscape." — Dr. Shishir Gupta, Founder & CEO, StartupLanes