Reliance Jio could be heading for another round of tariff increases, with Centrum Broking expecting a hike of around 12% over the next three to four months. The brokerage sees higher average revenue per user (ARPU) as a key driver of earnings growth for the telecom operator, which is preparing to tap the public markets through the initial public offering (IPO) of Jio Platforms.
Jio Platforms filed its red herring prospectus (RHP), the near-final offer document, on October 14. The IPO opens on October 21 and closes on October 23, and the offer is a fresh issue of up to 27 crore shares.
Why ARPU matters for Jio
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ARPU measures the average monthly revenue generated from each subscriber. For an operator with hundreds of millions of customers, even a modest increase can add substantially to revenue.
Centrum's report links Jio's growing customer base and rising data consumption to its ability to monetise investments in 5G and fixed broadband.
Jio's ARPU rose to Rs 215.6 in the first quarter of FY27 (April-June 2026) from Rs 208.8 a year earlier. Its customer base reached 533.3 million, while monthly data consumption per user rose to 43.7 GB from 37 GB.
Growth from here will depend increasingly on ARPU expansion as the subscriber base gets larger, Centrum said.
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Premiumisation, 5G and broadband offer growth levers
Higher tariffs are not the only route to better ARPU. Subscriber migration to premium plans, rising 5G adoption and growth in fixed broadband can also lift revenue per customer.
Jio Platforms' RHP also sees room on pricing. It says underlying connectivity ARPU "has significant headroom for growth". The first of three factors it cites is "periodic tariff rationalisation reflecting the improving value proposition and quality of services delivered to customers". The others are higher-value bundled plans and rising per capita income.
Jio's 5G subscriber base rose to 285 million in Q1 FY27 from 210 million in Q1 FY26. Fixed broadband customers rose to 28.6 million from 20 million, including 14 million JioAirFiber customers.
Centrum sees these trends helping Jio monetise its network investments beyond mobile connectivity. It also identifies home broadband, enterprise solutions and AI-led digital services as growth opportunities.
Earnings growth in focus ahead of the IPO
Revenue rose 10.8% year-on-year to Rs 34,212 crore in Q1 FY27, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 12.1% to Rs 18,709 crore. The EBITDA margin improved to 54.7% from 54% a year earlier.
Centrum expects revenue, EBITDA and profit after tax to grow at compound annual rates of 14%, 16% and 16%, respectively, between FY26 and FY29. It expects the tariff increase to support ARPU growth and values Jio's equity at about Rs 11.5 lakh crore, based on its valuation of the telecom business and other Jio Platforms entities.
Jio Platforms is seeking a market-discovered valuation of its telecom and digital businesses, and the issue proceeds are largely earmarked for repaying or prepaying debt.
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The risks to watch
The tariff hike is a brokerage forecast, not a confirmed pricing decision by Jio. Higher prices can lift revenue per user, but the benefit depends on customer response, competitive behaviour and Jio's ability to retain subscribers.
The RHP flags the same risk. It says the industry-wide tariff increase in the second quarter of FY25 lifted ARPU but also contributed to higher customer churn and slower customer growth. Future increases may meet resistance in price-sensitive segments, rivals may not follow, and the Telecom Regulatory Authority of India (TRAI) could intervene on pricing, it adds.
"There can be no assurance that we will be able to implement future tariff adjustments, or that any such adjustments will be sustained without material loss of customers," the RHP says.
The central question is whether Jio can turn rising data consumption and its expanding 5G and broadband base into higher revenue per customer. With the IPO approaching, ARPU growth and a possible tariff hike will remain central to the investment case.
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