Bharti Airtel discontinued four of its prepaid plans on August 12, and five days later Reliance Jio relaunched its Prime membership programme. According to two brokerage reports by Motilal Oswal and Nomura, Airtel moved to raise its entry-level pricing, and Jio responded with a scheme designed to hold on to its subscriber base and set the stage for a tariff hike of its own.
Airtel removes Rs 299 prepaid plan, raises entry-level unlimited tariff
Airtel withdrew its Rs 299, Rs 579, Rs 619 and Rs 649 prepaid plans on August 12. The Rs 299 plan mattered most as it was the cheapest entry point for users who wanted an unlimited daily data plan. As per Nomura estimates, roughly 18% of Airtel’s subscribers were on 4G unlimited recharge plans before the withdrawal.
With those plans gone, the cheapest unlimited daily plan on Airtel now starts at Rs 349. According to Nomura, this could push Airtel’s blended ARPU up by about 2.5% from its Q1FY27 quarter base of Rs 264 a month, assuming the company retains most of the affected customers. Nomura pegs the hit to consolidated EBITDA from the plan removal at under 1%, since the change essentially pushes users to costlier plans rather than cutting revenue.
Jio relaunches Prime membership with Rs 300 price protection benefit
Jio’s response came on August 17, marking ten years since its commercial launch. The company brought back its Jio Prime membership, first used when Jio launched in 2016 to retain early users. The new version costs Rs 300 as a one-time fee and offers price protection against any tariff hike until September 5, 2027, a cashback voucher of Rs 300 on new SIM or home broadband connections, early access to new products and priority customer support.
Jio kept its Rs 299 entry-level unlimited daily plan unchanged, compared with Airtel’s revised Rs 349 floor. As per the Motilal Oswal report, this keeps intact Jio’s original positioning of offering greater value than its rivals.
The Jio Prime relaunch is a direct answer to Airtel’s move, aimed at two groups: existing Jio users worried about a future price increase, and Airtel’s entry-level subscribers unwilling to pay the extra Rs 50 a month now required to stay on an unlimited plan, according to the Nomura report.
Jio Prime economics point to a possible telecom tariff hike
Both brokerages worked out what the Jio Prime economics imply about the timing of a tariff hike.
Motilal Oswal calculated the break-even point for a Jio Prime subscriber. If Jio raises tariffs by Rs 50 for a 28-day cycle before March 2027, a Prime member roughly recovers the Rs 300 upfront cost through the price lock. If the hike gets delayed beyond March 2027, the increase would need to be well above Rs 50 per cycle to justify the membership fee.
The brokerage’s exhibit shows the cost of price protection for a Prime member rising from Rs 25 a month if the hike comes in September 2026 to Rs 105 a month if it is delayed to July 2027, against a flat Rs 46 monthly ARPU gain from a Rs 50 hike.
Nomura reached a similar conclusion from the subscriber side. It estimates that even if only 10% of Airtel customers on the discontinued plans switch to Jio, the company would gain about 6.9 million net subscribers, or 1.3% of its current base. Jio lost close to 16.5 million subscribers, about 3.5% of its total, in the four months after its last tariff hike in July 2024. As per Nomura, the Prime launch gives Jio more confidence to raise prices this time with a smaller expected subscriber loss.
Airtel, Jio and Vodafone Idea subscribers face different pricing options
According to Motilal Oswal, since both Jio and Vodafone Idea still offer entry-level unlimited plans at Rs 299 for 28 days, some price-sensitive Airtel users could shift to either rival. The brokerage adds that Jio’s comparable plan to Airtel’s now-discontinued Rs 299 offer was actually its own Rs 249 plan, which Jio had already pulled from online channels about a year ago.
As per the Motilal Oswal report, a large share of users on both networks have likely already migrated to the Rs 349 unlimited 5G plans, given rising data consumption since 5G rollout, which limits how much churn the plan changes alone will cause.
Vodafone Idea weighs Airtel subscriber churn before changing tariffs
Vodafone Idea will hold off on any pricing changes for now, watching how Airtel’s customers respond to the plan withdrawal over the next couple of months, according to Nomura. If Airtel manages to shift its Rs 299 base to Rs 349 without much churn, Vodafone Idea is likely to follow with a similar move to capture the ARPU gain, Nomura added.
If churn turns out to be high, the company may instead need to offer its own version of price protection to hold on to customers weighing a switch. The report also noted that Vodafone Idea’s stressed balance sheet leaves it little room to lose subscribers while it also needs ARPU growth.
Telecom tariff hike of around 15% expected in December quarter
According to the Nomura report, an industry-wide tariff hike is expected in the December quarter of FY27, of around 15%. It forecasts consolidated EBITDA to grow at a compound annual rate of about 14% each for Airtel and Jio between FY26 and FY29, with Vodafone Idea slightly ahead at around 15%, off a lower base.