$150 Billion IPO: Can Jio Sustain ARPU Growth Without Tariff Hikes?

Synopsis: Jio’s ARPU continues to rise, despite tariffs staying the same. 5G, AirFiber, and some tweaks to their plans are driving most of this growth. Still, progress seems slow, and with the $150 Billion IPO deadline nearing, the pressure is mounting, and a major price change appears imminent.

By February 2026, Reliance Jio has more mobile subscribers than the combined populations of the US and Canada. The company covers India with 5G, and the volume of data passing through its network each month exceeds what many countries handle. Yet, Jio earns just Rs 213.7 per customer each month, roughly the cost of a nice meal.

That figure is rising, but not quickly enough. The difference between Jio’s current revenue and what it needs before its major stock market listing is growing, and now it’s becoming a significant concern.

The ARPU Crawl: Big Numbers, Slow Revenue

ARPU, which stands for Average Revenue Per User, is essentially how much money a telecom company earns per customer each month. Think of it like this: if you run a lemonade stand and have 100 customers, but each one only pays Rs 5, you’re not making much even though your stand is packed. 

Jio has 515 million customers and earns Rs 213.7 from each one per month as of the December 2025 quarter (Q3 FY26). That is up from Rs 211.4 the quarter before and Rs 203.3 a year earlier, representing just 1.1% quarter-on-quarter growth. If you look at the year-on-year numbers, growth is a bit better slightly up 5.1%. 

Jio says that’s thanks to more customer engagement, though they also gave out lots of unlimited 5G and broadband promos that ate into those gains. Annual growth looks decent on paper. But quarter to quarter? Investors are eyeing that number, and it’s not exactly exciting. 

A two-rupee increase in three months, when you’re already earning over 200 per person, feels pretty slow. It’s like a sprinter taking a leisurely walk to the finish line. Sure, the money is coming in and ticking upwards, but if Jio wants to hit those ambitious targets everyone’s talking about before an IPO, this slow growth won’t be enough.

Here’s the twist: Jio’s customers are using a ton of data. Average usage reached 40.7 GB per person per month in Q3 FY26, and total data traffic jumped 34% from last year, which is huge. But somehow, all that time spent on YouTube, Instagram, and JioCinema isn’t translating into higher revenue per user. People are streaming like crazy, but Jio isn’t getting them to pay more. That’s the main challenge Jio needs to solve in 2026.

The Airtel Gap

Let’s put this into perspective. Jio’s main rival, Bharti Airtel, just posted an ARPU of Rs 259 for the quarter higher than Rs 245 posted by the telecom major in Q3 FY25. Now, compare that to Jio’s Rs 213.7, which is a solid 21% difference, highlighting that airtel performed the best when it came to generating more revenue per user.

It makes it clear the two companies are playing different games. Airtel has fewer users, around 368 million versus Jio’s massive 515 million, but Airtel earns much more from each customer. In telecom terms, that’s called “premiumisation,” and Airtel is excelling at it.

Airtel keeps capitalizing on this trend. More people are moving to smartphones, and Airtel added 20.8 million new smartphone users over the year. Now, 79% of its customers are on smartphones. This means that Airtel has managed to move a large part of its base onto higher-priced, better plans. Meanwhile, Jio remains the top pick for customers searching for the lowest prices. 

Jio has this enormous, diverse user base, and that’s both an advantage and a challenge. When you’re the default option for half a billion people, including many with tight budgets, it’s hard to raise your average revenue per user. If Jio tries to increase prices, it risks losing the very users who came for its affordability.

Jio’s leadership is well aware of this. Anshuman Thakur, who leads strategy at Reliance Jio, siad that: “There is no impact of tariff increase in any of this. This is just an organic ARPU increase based on more offerings that we are giving to customers, the change in the customer mix, the change in the tariff plans. So completely driven by organic means, only and no tariff increase built in here.”  And Jio hasn’t officially raised prices. But they’re taking plenty of steps to push that number higher, and anyone paying attention can see exactly what’s happening.

Three Levers, One Slow Engine

Jio is trying to boost ARPU without officially increasing prices, and they’re doing it in three ways. All three approaches are making headway, just not as fast as they want. 

First, there’s the 5G migration. By December 2025, 253 million users had shifted to 5G with 19 million net additions, and now 5G accounts for more than half of Jio’s wireless traffic. This strategy works as 5G plans offer more data but are more expensive than basic 4G plans. So when someone upgrades from a Rs 199 plan to the Rs 349 unlimited 5G plan, ARPU rises and there is no need for a formal price hike. 

However, the issue was that Jio launched 5G with unlimited free data, which got millions used to fast internet at no extra cost. Now they have to persuade those same users to pay more, which is a hard proposition.

Second, there’s fixed broadband, mainly JioAirFiber. This service just surpassed 11.5 million subscribers, making it the first fixed wireless access provider in the world to cross 10 million users. Home broadband customers spend more monthly and rarely change providers, making them more valuable. Adding nearly 2.5 million FWA customers in a single quarter is significant, and this is the area analysts are most optimistic about for Jio’s ARPU growth.

Third, Jio is quietly adjusting its plans. The cheapest 1GB-per-day plans are gone now, for most users, the base price is Rs 299 or higher. This move pushes a segment of Jio’s customers to spend a little more, all without an official price hike. Taken together, these strategies are working but slowly. ARPU is climbing about 1% each quarter. At this pace, Jio could reach Rs 225 ARPU by the end of 2026, which is still short of the level the IPO narrative really needs.

The IPO Pressure

Let’s address the obvious Jio’s IPO. It’s not just a background buzz rather, it’s the main topic in every boardroom whenever Indian telecom is discussed. Reliance Jio Platforms is gearing up for an initial public offering, planning to float (sell) aorund 2.5% of the company. If everything goes according to plan, this could become India’s largest IPO ever valued at worth $4 billion

Investment bankers have been pitching valuations around $180 billion. At those figures, Jio would be ranked alongside the world’s major tech players, surpassing many American companies and even the GDP of some countries. Mukesh Ambani confirmed it at Reliance’s August 2025 AGM: Jio aims to list by June 2026.

Here’s where things get tricky. For a $150 billion valuation to be realistic, investors must believe Jio will soon achieve an average revenue per user (ARPU) of Rs 250–300. Right now, Jio is far from that mark. If we’re talking strictly organic growth, reaching that ARPU will still take years. 

JM Financial said that for the sector to earn a 12–15% pre-tax return on capital (ROCE) after heavy 5G investments, ARPU across the industry must rise to Rs 270–300 by FY28. The only way to get there in time for the IPO is through a significant tariff hike. Analysts are convinced it’s on the horizon. The debate is only about when and by how much.

Motilal Oswal Financial Services anticipates a 15% price hike (about Rs 50 per month on the base pack) in June 2026, moving back their earlier estimate from December 2025. Additionally, Morgan Stanley’s projections are even more aggressive: they expect a 16–20% hike across both 4G and 5G plans. 

Thus, everyone agrees that a hike is coming, which could generally uplift the ARPU of all telecom operators, including Jio; however, the real question is whether Jio acts before or after the IPO filing, and which move benefits Reliance the most.

This is where the strategy becomes interesting. Morgan Stanley quoted that earlier price hikes have typically favoured Airtel more than Jio. Airtel’s more premium customer base means it gains more ARPU from price increases. If Airtel begins to close the revenue gap just before Jio’s IPO, it could reflect poorly on Jio. So, Jio has a clear reason to delay price hikes until it secures its market lead and then raises prices after going public.

Interestingly, India’s telecom ARPU is around $2.4 per month, while the global average is between $6.20 and $10. Even after multiple tariff hikes since 2019, Indian data prices remain among the world’s lowest. Meanwhile, Indians consume more mobile data than anyone else but pays lesser than them. That sort of imbalance can’t go on forever and sooner or later, the companies, including Jio,will address it.

Jio has demonstrated that it can increase ARPU without directly raising tariffs supported by 5G migration, broadband expansion, and adjustments to current plans all contribute. However, progress remains gradual, and there is a noticeable gap between Jio’s current earnings and investor expectations for the future. With a potential IPO approaching, Jio’s upcoming strategies, especially regarding monetisation, warrant careful observation.

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