Bharti Airtel Increases Postpaid Tariffs by ₹50
Bharti Airtel's recent tariff hike raises questions about potential moves from competitors Jio and Vodafone Idea.
Bharti Airtel raises postpaid tariffs by ₹50, impacting 8-12% of revenue.
Historical trends show competitors often follow Airtel's pricing changes.
Analysts predict further tariff hikes in 2027 to sustain industry growth.
In a significant move, Bharti Airtel has increased its postpaid tariff plans by ₹50, a decision that is expected to influence the pricing strategies of its competitors, Reliance Jio and Vodafone Idea. This adjustment, which affects a segment contributing between 8% to 12% of Airtel's overall revenue, raises the question of whether Jio and Vodafone Idea will follow suit in the near future.
The backdrop of this tariff hike is rooted in a pattern observed over the past decade, where telecom operators tend to mimic each other's pricing strategies. Equirus Securities, which initiated coverage on the telecom sector on September 28, noted that such moves are often reactive rather than proactive. For instance, in December 2019, both Airtel and Vodafone Idea announced tariff increases, which were quickly matched by Jio shortly thereafter, indicating a trend of competitive pricing adjustments in the industry.
Following the 2019 increases, the Average Revenue Per User (ARPU) for Airtel rose from ₹135 to ₹166 within a year, while Jio and Vodafone Idea experienced similar uplifts. A similar pattern was observed in November 2021 when Airtel again led a blanket increase across prepaid plans, resulting in further ARPU growth for all three major players. This historical context underscores the likelihood of Jio and Vodafone Idea responding to Airtel's latest move.
Looking ahead, analysts anticipate that the ongoing 5G rollout and capital investments will necessitate additional tariff adjustments across the industry. Equirus has projected a potential 10% to 20% hike in tariffs during the latter half of the financial year 2027, which could elevate Airtel's ARPU to over ₹300 by 2028. This forecast is critical as it reflects the industry's need for sustainable pricing strategies to ensure long-term profitability.
As the telecom sector braces for these changes, all eyes will be on Jio and Vodafone Idea to see if they will follow Airtel's lead. Additionally, with Jio's upcoming IPO on the horizon, market analysts are closely monitoring how these tariff changes might influence investor sentiment and overall market dynamics in the telecom space.
