Regulator Questions Jio, Airtel On Removing Entry-Level Plans

(MENAFN- Live Mint)

India's telecom regulator has asked Reliance Jio Infocomm Ltd and Bharti Airtel Ltd to explain why they removed their cheapest 1GB entry-level mobile plans, said four people in the know, amid concerns that low-income individuals relied on these for basic internet access.

The department of telecommunications (DoT) also asked the Telecom Regulatory Authority of India (Trai) to look into the issue and submit a report, one of the four persons cited above said. All spoke on the condition of anonymity.

While Jio said its recharge plan continues to be available only offline via Jio stores, Airtel cited internal assessment and usage analysis, among other reasons, for discontinuing the plans, according to two people cited above.

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On 19 August, Mint had reported that the two operators pulled their entry-level 1GB per day plans that cost ₹249 each: Reliance Industries Ltd-owned Jio offered a 28-day validity, and Airtel's plan was valid for 24 days. Jio first removed the plan from its website, and Airtel followed suit.

According to analysts at JM Financial, the move was aimed at boosting average revenue per customer, or Arpu, a key telecom industry metric. The changes in the entry-level plans by the market leaders indicate the possibility of another increase in headline tariffs shortly, the brokerage said, citing the potential initial public offering of Jio.

Airtel's new entry-level tariff plan costs ₹299 and is valid for 28 days for 1 GB of daily data. In comparison, Jio offers 1.5 GB per day for ₹299 for 28 days. The move has raised concerns about affordability and continued internet access for low-income users.

Queries emailed to Reliance Jio, Bharti Airtel, department of telecommunications (DoT) and Trai did not elicit any response till the press time.

“Trai is a regulator. It has all the powers to intervene where necessary, keeping in view the consumer interest," the second person quoted earlier said, adding that the companies have submitted the responses and those are being reviewed.

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The person said each telecom company offers multiple plans to meet various consumer requirements.“Hence, they are at liberty to design their tariffs based on market forces of demand and supply. However, this liberty is not unrestrained, and it is subject to regulatory checks."

What operators say

According to the third person, Jio said in its response to Trai that it has repositioned some of the packs based on its market analysis, and some of these plans are now available only on Jio stores.

On the other hand, Airtel discontinued the ₹249 plan with effect from 20 August 2025, the fourth person quoted above said, adding that such steps are taken after analysing the market to enhance value for customers.

“The ₹299 plan is a better plan with more validity," the fourth person said, adding that tariffs are affordable.

An executive at one of the two operators told Mint the plans were removed based on user preference for higher data packs. Earlier, in the absence of 5G, daily 1-1.5 GB data plans were in demand, the executive said. With 5G, there is a huge increase in data consumption and it does not make sense to continue with unpopular plans, the executive added.

Plans still affordable

However, in a recent letter to communications minister Jyotiraditya Scindia, a member of parliament from Karnataka said that farmers in his constituency cannot afford the telecom tariffs.

India's entry-level telecom plans cost 1.24% of per-capita GDP (gross domestic product) or the average national income, higher than markets like Thailand, Malaysia, China, and Indonesia, according to a 20 July note of UBS Research. That makes it the least affordable among these countries.

However, overall, India is still among the countries with the lowest telecom tariffs. In February, Scindia told the parliament that mobile phone tariffs have come down by 94% since 2014. He had said that the cost of data was ₹270 per GB in 2014, which has come down to ₹9.70 per GB.

The government does not intervene in free-market decisions. Any change in mobile services tariffs is notified by telecom operators to the regulator Trai.

“Forbearance is not permanent. Trai has all the powers to invoke the same and intervene whenever there is a need to protect the consumer interest," said Satya N. Gupta, former principal advisor at Trai and professor at South Asian University.

Steady rise in tariffs

Telecom operators raised tariffs in July last year after a gap of over two years. Reliance Jio took the lead in raising tariffs between 12% and 25%.

At the time, the communications ministry had acknowledged that higher investments had prompted the hike.

“It is pertinent to mention here that the TSPs (telecom service providers) have increased the prices of mobile services after more than 2 years," the communications ministry said in a 5 July 2024 statement.“In the last 2 years, some of the TSPs have invested heavily in rolling out the 5G services across the country."

The move had boosted what operators earn on average from a user. As of June end, Jio's Arpu was at ₹208.8 a month, lower than Airtel's ₹250.

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Citing that 20-25% of Jio's subscribers are likely on 1GB a day plan, JM Financial estimates that the move could lead to Jio's Arpu further rising by ₹11-13 a month, or 6-7%. For Airtel, 18-20% of its subscribers are likely on 1GB/day plan, which could lead to its Arpu rising by ₹10-11/month, or 4-4.5%.

JM Financial, however, said in a 29 August note that a near-term tariff hike can't be ruled out, citing Jio's potential listing plans.

In its 48th annual general meeting (AGM) on 29 August, Reliance Industries announced it aims to list Jio by the first half of 2026, subject to all necessary approvals.

Doing away with entry-level plans is“indicative of telcos' pricing power to boost Arpu even without taking an explicit tariff hike", the analysts at JM Financial said.“...this could also be indicative of probable monetization of 5G plans in the next 1-2 years."

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