Telecom giants Reliance Jio and Bharti Airtel have decided to withdraw their entry-level 1 gigabyte (GB)-per-day prepaid plans, marking the beginning of a potential new pricing structure that could lead to higher tariffs across the board.
As of now, Jio and Airtel are gradually nudging consumers toward higher-tier plans. Jio has removed its ₹249 plan (1 GB per day for 28 days), replacing it with a ₹299 plan offering 1.5 GB per day. Similarly, Airtel has adjusted its entry-level plan from ₹249 (1 GB) to ₹279 (1.5 GB), offering more data at a higher price. Both providers have shifted away from lower-value options, making it clear that the entry-level tariff for new customers is going up.
Industry analysts believe this change might set the stage for broader tariff hikes. While there are no official announcements yet, some experts speculate that prices could increase by 10-15% this year, especially as demand for data continues to rise.
This shift is largely driven by evolving data usage patterns. Since the introduction of 5G services in India, demand for 1 GB per day plans has been on the decline. Many consumers are now opting for higher data plans as their usage increases with faster internet speeds. According to industry insiders, the days of low-cost, entry-level plans may be numbered as telecom companies focus on catering to customers who are consuming more data.
As data-heavy plans take over, it’s expected that telecom providers will adjust their tariff structures further, aligning with these new usage trends. Some analysts have even predicted that Vodafone Idea (Vi), another major player in the market, could follow suit, especially as the company works to improve its financial performance.
Looking ahead, experts believe that this could be a precursor to a wave of price increases across the sector. The last major hike, which occurred in 2024, saw tariffs rise by up to 21%, with an impact on subscriber numbers as some customers switched to Bharat Sanchar Nigam.
With the ongoing shifts in pricing and data plans, another round of hikes is expected by mid-2024, and it’s speculated that this could continue through to 2025. While these changes are likely to boost revenue for telecom companies, affordability will remain a critical issue for India’s price-sensitive market.
Telecom companies have long argued that the current pricing structure is unsustainable. Airtel’s vice-chairman, Gopal Vittal, has voiced concerns about the long-term viability of low-cost tariff structures.
With the cost of providing services rising, telcos are now focusing on increasing the Average Revenue Per User (Arpu) to ensure profitability.
