NEW DELHI: The Indian telecom sector is expected to stabilise with an additional tariff hike of 15% by the fiscal year 2027, according to a report by JP Morgan. The report notes that despite a decade marked by disruption, the Indian telecom sector will stabilise, with another tariff increase anticipated by FY27.
Additionally, the current regulatory climate provides a conducive environment for telecom companies to implement successive tariff increases without alienating consumers.
“We believe India will stay in tariff repair over the next few years supported by a benign regulatory regime after a decade of disruption given limited returns, lack of AGR relief and persistent affordability. We build in 15% tariff hikes in FY27 as well,” reads the report. According to the report, mobile tariffs in India remain significantly lower than those in other Asian markets, with the Indian data yield at just $0.09 per GB. J.P. Morgan believes that as affordability improves and regulatory pressures ease, telecom operators such as Bharti Airtel, Reliance Jio, and Vodafone Idea can progressively raise tariffs to align more closely with regional trends.
“India has the lowest data yield among its Asian peers nine years after Jio’s disruptive entry and after three tariff hikes,” said the report. This low pricing structure, coupled with mobile fees accounting for 0.7% of GDP, indicates substantial headroom for tariff increases.