India’s telecom industry is entering a new phase. For years, the story was about adding subscribers. Now it is about getting each subscriber to pay more. Top brokerages tracking the sector say this shift, known as premiumisation, is already showing up in the numbers, and it is set to define how the industry grows over the next three years.
According to the latest Jefferies report, India’s mobile sector revenues rose 8% year on year in the June quarter of FY27, touching an annualised run rate of about $33 billion. That is a fresh high for the industry, and growth actually improved slightly from the previous quarter, the report noted.
According to the report, the growth came without a tariff hike. As per the Jefferies report, the next round of price increases will only be in April 2027. Until then, the sector is relying on two things: more subscribers and richer average revenue per user, or ARPU.
Bharti Airtel gains telecom market share
Bharti Airtel remains the standout performer. The company posted 10% year-on-year revenue growth in the June quarter, well ahead of the industry average, according to Jefferies. That came from a mix of 7% ARPU growth and 3% subscriber growth.
The scale of Airtel’s contribution is striking. According to the report, the company accounted for nearly 45% of all incremental industry revenue during the quarter. It delivered double-digit revenue growth in 11 of its 22 telecom circles, and gained 20 basis points of revenue market share compared to FY26, taking its share to roughly 40% of the industry.
The gains were not spread evenly. According to the report, most of the market share improvement came from just four circles: Tamil Nadu, Maharashtra, and both parts of Uttar Pradesh. Airtel actually lost ground in eight of its 22 circles, but its strength in urban and rural markets alike kept the overall trend positive.
Vodafone Idea revenue and ARPU growth
Vodafone Idea remains the laggard among India’s three private operators, but the picture is less bleak than before. Jefferies noted that the company’s revenue grew 3% year on year in the June quarter, even as its active subscriber base shrank 3%. A 6% rise in ARPU helped offset the subscriber losses.
The brokerage said VIL’s revenue market share slipped to about 13%, with most of the damage concentrated in just two circles, Mumbai and Gujarat. Elsewhere, the company actually gained ground, adding 40 basis points of share in B circles and 20 basis points in C circles.
As per the Jefferies report, this is a sign of gradual operational stabilisation. The subscriber losses are slowing down, and the market share erosion is becoming narrower rather than broad-based, the brokerage said.
Airtel removes Rs 299 prepaid plan
While Jefferies’ report captures the ARPU story from a distance, the ground reality shows exactly how operators are engineering it. Airtel discontinued four prepaid plans on August 12, including its popular Rs 299 pack that offered 1GB of data a day.
According to JM Financial, the withdrawn plans also included a Rs 579 pack, a Rs 649 pack, and two other mid-range options. With the Rs 299 plan gone, Airtel’s cheapest daily data plan now starts at Rs 349.
As per the JMFL report, if just a tenth of Airtel’s subscriber base shifts to plans priced about Rs 50 higher, the company’s blended ARPU could climb by Rs 5 to 6, a gain of nearly 2% from the Rs 264 recorded in the June quarter. That translates into a roughly 1% lift to India EBITDA and about Rs 21 added to the brokerage’s per-share valuation of the stock.
According to a Nomura report, around 18% of Airtel’s subscribers were on 4G unlimited plans before the Rs 299 pack was pulled, and the change could push blended ARPU up by about 2.5%.
Jio Prime offers tariff price protection
Reliance Jio did not raise its prices in response. Instead, on August 17, the day marking ten years since its commercial launch, it revived its Jio Prime membership. The scheme, first used when Jio launched in 2016, now costs Rs 300 as a one-time fee.
The offer bundles in a price protection benefit against any tariff hike until September 2027, a Rs 300 cashback voucher on new connections, and early access to new products. Jio also kept its own Rs 299 entry-level unlimited plan untouched, according to a Motilal Oswal report, preserving its positioning as the cheaper option against Airtel’s new Rs 349 floor.
Motilal Oswal worked out the economics of the Jio Prime offer and found it is really a bet on timing. If Jio raises tariffs by Rs 50 for a 28-day cycle before March 2027, a Prime subscriber roughly earns back the Rs 300 fee through the price lock. Wait longer than that, and the math stops working in the customer’s favour.
However, as per the Nomura report, the Prime relaunch gives Jio the confidence to push through a tariff hike with less fear of losing subscribers, unlike the last hike in July 2024, when the company lost close to 16.5 million users in four months.
India telecom tariff hike expectations
Nomura expects an industry-wide tariff hike of around 15% in the December quarter of FY27. However, Jefferies is more conservative, pencilling in the next round of hikes only in April 2027.
Either way, the direction is not in question. According to Jefferies, India’s mobile sector revenues may grow at a 12% compound annual rate between FY27 and FY29, taking the market from roughly $33 billion currently to about $46 billion by FY29, even with revenue market shares expected to stay broadly stable across operators.
Vodafone Idea, meanwhile, is watching from the sidelines. Nomura said the company is holding off on any pricing changes for now, waiting to see how Airtel’s customers respond to the plan withdrawal over the next couple of months. If Airtel manages the transition without much churn, VIL is likely to follow with a similar move of its own.
Airtel and Jio expand beyond mobile services
Premiumisation is not just about prepaid plans. Both Airtel and Jio are building businesses well beyond mobile connectivity, and analysts see this as the next leg of the ARPU story.
Airtel has been expanding into payments, lending, cloud services, cybersecurity and data centres, according to a recent Axis Securities report. Its data centre arm, Nxtra, added 11 new customers in the June quarter as it works toward a long-term capacity target of 1 gigawatt. Jio is following a similar playbook, scaling up its home broadband, enterprise, cloud and AI offerings.
This diversification matters because it lets operators capture a bigger share of what customers spend every month, beyond the monthly recharge. Axis Securities noted that as 5G rollout shifts from expansion to monetisation, capital spending on radio infrastructure should ease, freeing up cash flow even as investment continues in fibre, transport networks and data centres.
Bharti Airtel stock outlook and price target
Jefferies has reiterated its Buy rating on Bharti Airtel, calling it its top pick in the sector, with a price target of Rs 2,400. The brokerage’s rating history shows a steady climb in that target over the past two years, from Rs 1,090 in October 2023 to the current level, tracking the company’s consistent outperformance on both revenue growth and market share.
The risks flagged by Jefferies are the usual suspects for the sector: a delay in tariff hikes, higher-than-expected capital spending, and slower-than-anticipated 5G monetisation. But for now, the data points in one direction. India’s telecom operators have found a way to grow without waiting for the next official price hike, and premiumisation looks set to be the theme investors watch most closely through FY27.