Telecom operators’ ability to drive premiumisation through bundled data plans could come under pressure if the Telecom Regulatory Authority of India’s (TRAI) latest draft tariff changes are implemented, analysts and industry experts said.
The impact expected to be sharper on companies with large feature phone user bases such as Vodafone Idea and BSNL, while remaining limited for Bharti Airtel and Reliance Jio, the added.
The draft Telecom Consumer Protection (13th Amendment) Regulation, 2026 proposes that operators offer voice and SMS-only plans across all validity periods, with tariffs proportionately lower than bundled offerings.
“This could dilute the industry’s long-standing strategy of nudging users towards higher-value data packs, which has underpinned average revenue per user (ARPU) expansion in recent years,” an industry executive said. If implemented strictly, it could widen the price gap between entry-level voice users and data subscribers, weakening the economic incentive to migrate up the value chain, they added.
Analysts indicate that enforcing proportional pricing could lead to revenue compression in the voice segment, particularly if operators are unable to offset losses through tariff hikes elsewhere. This comes at a time when the industry has been relying on premiumisation — driven by higher data consumption and bundled offerings — as a key lever for revenue growth.
Companies with a larger base of feature phone users, such as Vodafone Idea and state-run BSNL, are more exposed to potential downtrading risks, as a wider availability of cheaper voice-only packs could anchor a segment of users at lower ARPU tiers.
Revenue at Risk
For Vodafone Idea which has around 65 million feature phone users, a 10% reduction in voice plan pricing could translate into an annual revenue loss of about Rs 1,200–1,250 crore, with a potential 15% impact on cash Ebitda, analysts estimated.
Airtel, which has a larger feature phone base of around 75 million users, could see a higher absolute revenue impact of Rs 1,400–1,450 crore, although the effect on profitability is expected to be limited to around 1.5% given its larger earnings base.
“For Bharti Airtel and Reliance Jio, which have already transitioned a significant portion of their base to 4G and data-heavy plans, the effect may be more contained but still relevant at the margin,” an analyst tracking the sector said.
At present, tariff design favours bundled plans, where incremental data comes at a relatively low marginal cost, encouraging users to upgrade. The proposed framework challenges that model by requiring pricing to more closely reflect actual service consumption.
Ending the Subsidy
The existing pricing distortion flagged by the regulator becomes clearer when seen through usage patterns. Under current bundled tariffs, heavier users benefit from sharply lower effective rates — for instance, a subscriber consuming around 1,000 minutes on a Rs 199 plan pays roughly Rs 0.2 per minute, while a low-usage consumer using about 200 minutes ends up paying around Rs 1 per minute. This creates a regressive structure where low-usage, often feature phone users effectively subsidise high-consumption data users.
TRAI’s push for proportional pricing seeks to correct this imbalance by lowering tariffs for voice-only packs. At the same time, this also risks formalising a lower-priced entry tier, which could anchor a segment of users at the bottom of the ARPU ladder rather than nudging them towards higher-value bundled plans — a dynamic that has so far supported premiumisation.
Industry executives suggest the final impact will depend on the degree of flexibility allowed in pricing and how operators recalibrate their portfolios. If the regulatory push leads to a flattening of tariff structures, the sector’s premiumisation trajectory — a key driver of recent financial recovery — may lose some momentum, at least in the near term.