The average revenue per user (ARPU) repair in the Indian telecom sector would continue from the first quarter of 2025 and may continue beyond, said analysts on Monday.
The Indian telecom tariffs are low in absolute terms as compared with other global comparable markets, which should support potential tariff hikes going forward, they said.
“We expect higher data consumption, higher tariffs and premiumisation of existing data users to high-value packs to continue, driving stronger ARPU,” said Rahul Malhotra at Bernstein Societe Generale Group, an independent research firm.
Top beneficiary
He said Bharti Airtel (Airtel) is the top beneficiary of the telecom repair cycle with leading ARPU growth, improving cash flow, growth opportunities in enterprise and fibre and 5G rollout.
In July 2024, the three private telecom operators — Airtel, Reliance Jio (Jio) and Vodafone-Idea (VIL) – had increased entry-level tariffs by 11-25 per cent.
“While we expect further consolidation of the market by 2026 with revenue share of Jio at 47 per cent and Bharti at 38 per cent, we expect the pace of consolidation to decrease in the near term as VIL expands capacity supported by recent funding inflow. Jio subscriber share expected to reach 48 per cent by FY27 while Bharti share should reach around 35 per cent as VI would eventually record net subscriber additions led by 4G coverage expansion and eventual 5G rollout,” Malhotra of Bernstein added.
According to ICICI Securities also, Airtel’s ARPU may grow 5 per cent quarter-on-quarter (QoQ) /17.7 per cent y-o-y to ₹245. RJio’s ARPU may jump 3.8 per cent q-o-q /11.5 per cent y-o-y to ₹203 – optically, growth may appear lower as compared to Airtel’s, as RJio has a higher proportion of long validity subscribers. Hence, tariff hike translation is staggered. VIL’s ARPU is expected to rise 3 per cent q-o-q /10.8 per cent y-o-y to ₹161, it said.
