Jio’s Faustian Bargain

Mukesh Ambani may be about to test the limits of India’s telecom price elasticity.

Having lured in 480 million subscribers with cut-price plans, Ambani’s Jio now faces a classic dilemma: how to raise prices without scaring away its user base?

A recent BofA Securities’ survey has found most Jio customers will grudgingly stomach a 20-25% tariff hike. That’s good news for a debt-laden balance sheet straining under 5G rollout costs.

But playing with price elasticity is a dangerous game. Over a quarter of Jio users say they’ll churn or downgrade if the value equation tips too far.