Indian Telecom Industry Braces for Significant Tariff Hikes by 2025

The Indian telecom sector is expected to implement over 15% tariff hikes by late 2025, with entry-level plans likely exempt from such increases. These hikes are deemed crucial for financial stability, particularly for Vodafone Idea, amid ongoing industry challenges in revenue growth and customer retention.

The Indian telecom sector is preparing to raise tariffs by over 15% by the end of 2025, according to an IIFL Capital report. Entry-level plans are expected to remain untouched, reflecting a strategic focus on affordability for low-income users.

The report highlights the importance of these hikes for the financial stability of Vodafone Idea (Vi), which continues to strive for competitive positioning as the third major player in the market. Recent tariff hikes in July 2024 resulted in SIM consolidation and decreased revenue gains for both Jio and Vi, due to weaker consumer spending power.

The Telecom Regulatory Authority of India (TRAI) has recently instructed companies to offer voice-and-SMS-only packs, addressing concerns over rising tariffs, especially for entry-level users. Although challenges persist, the report maintains that tariff increases remain essential for sustaining Vi's financial health and competitiveness in the sector. The industry aims to find a balance between financial sustainability and consumer affordability to ensure long-term viability.

(With inputs from agencies.)