RJio confident of organic Arpu growth, sees no immediate need for tariff hike

This contrasts with the stance of rival operators Bharti Airtel and Vodafone Idea that have repeatedly flagged the need for tariff correction to improve their returns on capital deployed. Airtel, in particular, has been arguing that India’s telecom tariffs remain among the lowest globally and that there is scope for higher Arpu also through a differentiated pricing structure compared to a “one-size-fits-all" pricing model.

“We are quite happy with the traction—1% (quarterly) increase in Arpu. Over the last year, it has gone up by almost 5-5.5%. We have certain handles to improve the Arpu while contributing giving more value to the customers and that's what we will continue to focus on," said Anshuman Thakur, head of strategy at Reliance Jio, during an earnings call with analysts on Friday.

“Organically if we can improve our Arpu by 5-6% a year. I think that's a good number, a good place to be in while adding many more customers," Thakur said, adding that the telecom operator is seeing a lot of uptake in 5G data consumption on its network.

In the December quarter, Jio’s monthly Arpu rose 110 basis points, or 1.1% sequentially, to ₹213.7 from ₹211.4 at the end of September. In the absence of tariff hikes, the growth in the operator’s Arpu has been rising about 1% sequentially over the last one year, which in a way has restricted the growth of the operators, given there are promotional 5G offers.

In terms of Arpu, Airtel currently leads the pack at ₹256 a month as of September end. Vodafone Idea’s Arpu was ₹167. Both are yet to declare their earnings for the December quarter.

Brokerage house Citi, in a 5 January note, said it expects the next tariff hike to be “around the listing of Jio, which is planned for the first half of the current year". Citi has deferred its expectation from December 2025 to June 2026.

Jio Platforms, which will be filing its draft papers for listing on the stock exchanges, houses the telecom and digital services business of Reliance Industries. Reliance Jio Infocomm is a subsidiary of Jio Platforms, accounting for most of its business.

When telecom operators last raised tariffs in July 2024, after a gap of over two years, it was Reliance Jio that took the lead with a 12–25% increase. But while Airtel and Vodafone Idea have been vocal about the need to hike tariffs to increase the return on capital employed (RoCE, a measure of profitability and efficiency), Jio has refrained from openly talking about tariff hikes.

Along with the July 2024 tariff hikes, both Jio and Bharti had increased the data offered under their minimum recharge plans, which subscribers need to avail 5G benefits (to 2 GB/day from 1.5 GB earlier). Last year, they scrapped their entry-level packs.

According to Citi, the July 2024 tariff hikes, initiated by Jio (the previous two were initiated by Airtel) indicates a shift in stance of the market leader with monetization now a clear priority, which improves visibility of future tariff hikes.

“Organically if we can improve our Arpu by 5-6% a year. I think that's a good number, a good place to be in while adding many more customers," Thakur said, adding that the telecom operator is seeing a lot of uptake in 5G data consumption on its network.

In the December quarter, Jio’s monthly Arpu rose 110 basis points, or 1.1% sequentially, to ₹213.7 from ₹211.4 at the end of September. In the absence of tariff hikes, the growth in the operator’s Arpu has been rising about 1% sequentially over the last one year, which in a way has restricted the growth of the operators, given there are promotional 5G offers.

In terms of Arpu, Airtel currently leads the pack at ₹256 a month as of September end. Vodafone Idea’s Arpu was ₹167. Both are yet to declare their earnings for the December quarter.

Brokerage house Citi, in a 5 January note, said it expects the next tariff hike to be “around the listing of Jio, which is planned for the first half of the current year". Citi has deferred its expectation from December 2025 to June 2026.

Jio Platforms, which will be filing its draft papers for listing on the stock exchanges, houses the telecom and digital services business of Reliance Industries. Reliance Jio Infocomm is a subsidiary of Jio Platforms, accounting for most of its business.

When telecom operators last raised tariffs in July 2024, after a gap of over two years, it was Reliance Jio that took the lead with a 12–25% increase. But while Airtel and Vodafone Idea have been vocal about the need to hike tariffs to increase the return on capital employed (RoCE, a measure of profitability and efficiency), Jio has refrained from openly talking about tariff hikes.

Along with the July 2024 tariff hikes, both Jio and Bharti had increased the data offered under their minimum recharge plans, which subscribers need to avail 5G benefits (to 2 GB/day from 1.5 GB earlier). Last year, they scrapped their entry-level packs.

According to Citi, the July 2024 tariff hikes, initiated by Jio (the previous two were initiated by Airtel) indicates a shift in stance of the market leader with monetization now a clear priority, which improves visibility of future tariff hikes.

“It seems that Jio is currently cautious on the tariff hikes because of its upcoming IPO (initial public offering). I believe increasing the tariffs post IPO would give them more substantial gains in the share price," said Faisal Kawoosa, chief analyst at Techarc, a technology market research company. “However, the telecom operator could follow if other operators take lead in tariff hike during this time."

According to Kawoosa, given the premiumization in the smartphone market, there is also a need for a tiered structure of pricing in the telecom sector. “There has to be subsidized pricing for lower strata and premium pricing for higher strata. This would keep the base level of consumption affordable to everyone, while also boosting Arpu for telecom operators from premium priced plans," he said.

During the December quarter, per capita data consumption on Jio’s network was 40.7 GB per month with total data traffic growth of 34% year-on-year. The total data traffic on the company’s network rose to 62.3 billion GB, compared to 58.4 billion GB in the preceding quarter and 46.5 billion GB in the previous year.

Citing a recent third-party study, Thakur said when consumers are on the Jio 5G network, 99% of the time, they are actually consuming 5G, whereas on any other network, they are consuming 5G for less than 50% of the time.

During the analyst call, the company did not give the timeline for listing Jio Platforms, which houses Reliance Industries Ltd’s telecom and digital services business. “We are awaiting the new notification to come from the government to see what the final details are going to be. We are working on the assumption that it's in line with whatever Sebi (the Securities and Exchange Board of India) has recommended. But we will still have to wait for that before we finalize," Thakur said.

For companies with a post‑issue market capitalization above ₹5 trillion, the regulator has proposed that they be allowed to dilute 2.5% of equity at the time of listing, down from the existing norm of 5% minimum public offer. The 2.5% dilution rule lets these big firms list without flooding the market, while still complying with public shareholding norms, making mega-IPOs manageable and investor-friendly.

Even as telecom contributes the bulk of revenue, Jio’s non-connectivity digital services are becoming increasingly significant. This segment includes managed technology services, cloud, bundled content, and devices.

The company recently partnered with Google to offer Gemini Pro plan to its users free of cost. “Increasing adoption of digital services, such as cloud and AI services, creates differentiation opportunities in the near-term (for example, Jio bundling Google AI Pro) and a possible monetization opportunity in the medium term," said brokerage house BNP Paribas in a note dated 12 January.

Thakur said that Jio was in a very good position, and it could choose the services it wants to offer and those could be coming in from Reliance Intelligence or from any of the other partners or service providers.

In August last year, Reliance Industries chairman and managing director Mukesh Ambani launched Reliance Intelligence, the company’s artificial intelligence arm, and announced expanded partnerships with shareholders Google and Meta Platforms for AI applications and services.

“Jio is now in that unique position where there is no cost to Jio. It is taking products to the market," Thakur said. "Jio can optimize the access, the reach, the knowledge of the customers and in fact these are now revenue generating opportunities for Jio. So Jio actually makes revenue out of these things."

On capital expenditure for data centers and GPUs (graphics processing units), Thakur said that it would be incurred by Reliance or Reliance Intelligence and Jio will not directly incur this. The company can access these assets through long-term lease arrangements to offer services such as Jio Cloud or Sovereign Cloud to customers.

Home broadband push

Jio has been increasing its focus on home broadband. According to the company, during the reporting quarter, total connected premises with fixed broadband increased to 25.3 million. JioAirFiber continued to accelerate the pace of subscriber additions with a base of over 11.5 million as of December 2025.

Jio has set a target of 100 million home broadband customers, with no specified timeline.

The company is also focusing on improving cost efficiency in home broadband through its fixed wireless access (FWA) offerings. Unlike fibre, which requires a dedicated line for each household, FWA uses unlicensed band radio (UBR) technology to deploy a single receiver that can serve multiple homes, lowering the cost per subscriber.