Next year, telecom companies can increase their tariff plans by up to 20 percent.
Next year, mobile and internet users are going to get a big shock. Telecom companies can increase the tariffs of 4G and 5G plans by up to 20 percent next year. This has been predicted by the world’s leading brokerage firm Morgan Stanley. Morgan Stanley estimates that telecom companies will increase the prices of 4G and 5G plans by 16-20 percent between April and June 2026. This is happening much faster than his earlier estimate, in which he had estimated growth of 15 percent by mid-year.
So there will be an increase for the fourth time in 8 years
In a report dated December 15, analysts said that we estimate that the prices of both prepaid and postpaid 4G/5G plans will increase by 16-20 percent in 2026. The report said that recent steps like discontinuing cheap plans and adding streaming services only with premium plans indicate that companies are preparing customers for increased prices. This will be the fourth major price increase in eight years. The industry had projected growth of 15 percent in 2024, 20 percent in 2021 and 30 percent in 2019. According to Morgan Stanley, every time stronger companies like Airtel have generated more revenue, weaker companies have been left behind.
Who is ahead on the revenue front?
This shows that Airtel is steadily increasing its revenue share in the industry, which will increase from 36 percent in early 2024 to over 40 percent by 2028, while Vodafone Idea’s share will decline from 24 percent to 18 percent. In terms of customers, Vi’s share will decline from 29 percent to an estimated 22.5 percent by 2028, while Airtel will remain stable at around 32 percent. For Airtel, the average revenue per user (ARPU) in India is expected to increase from Rs 260 in FY 2026 to Rs 299 in FY 2027 and Rs 320 in FY 2028.
What will be the APRU of the companies?
Analysts predict that this growth will not stop here, and ARPU will reach Rs 370-390 by FY 2032 due to better data pricing (where India charges less per GB compared to Southeast Asian countries), increase in the number of postpaid users and roaming packages as travel in the country picks up. This also means that this will be a favorable time for Airtel and Jio as the 5G networks are almost completely built and the capex, which was once 30 per cent of the revenue, is now coming down to 20 per cent. It also said that Airtel’s India business alone will generate free cash flow of $8 billion in the financial year 2026-27.
Why will revenue increase?
According to Stanley, India is in a favorable position for the capital investment cycle. Capex will probably be lower than the highest level in FY 2024, while as a percentage of revenue, it may be much lower than the previous cycle, because the company is in the monetization phase. The investment firm also estimates that Airtel’s 5G air fiber-based home broadband service will triple its revenue to Rs 145 billion by FY 2028, with 26 million customers. Enterprise services revenue is expected to reach Rs 304 billion due to data center investments.
Why is Airtel’s share increasing?
The firm said that these non-mobile businesses of Airtel are growing revenue at the rate of 20 percent annually and now account for 21 percent of the total revenue. Airtel has been steadily growing market share, with 31-32% share of 4G/5G subscribers and is expected to garner around 40% of industry revenue by FY2028. Interestingly, if Vodafone Idea gets funding and regulatory relief, it sees that as the main “uncertain factor”, and says it could slow down the monopoly of Airtel and Jio.