The Indian telecom industry is all set to see an upward trajectory for its ARPU (average revenue per user). According to CRISIL, the ARPU is expected to exceed Rs 225 in fiscal 2026. It is worth noting that the private telecom operators in India recently hiked the prices of their mobile plans. The hike came after a long break of three years and is all set to boost the overall revenue levels for the telecom operators. The ARPU that CRISIL is talking about where is the per-month figure.
The ARPU for the sector in fiscal 2024 was Rs 182. The effect of a tariff hike usually shows after 2 to 3 quarters. This will also impact the individual ARPU figures for the telecom operators in the country.
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According to CRISIL, the effect of the tariff hike will also reflect on the return on capital employed (RoCE) for the telcos. The telecom operators have already started moderating the Capex levels from FY25 onwards. The 5G rollout for both Jio and Airtel is almost complete and they will look to 5G now. Both Jio and Airtel are now offering 5G with plans that offer 2GB daily data and more. This means that consuming 5G has become more expensive than before in the country.
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Telcos aren't expected to spend much on the spectrum for the next few years. They don't have any major renewals until 2030 and also have the required 5G bandwidth. It will be Vodafone Idea (Vi) that will likely spend more money to get 5G airwaves in the future. Bharti Airtel has the highest ARPU in the industry, at Rs 209 for the quarter ending March 31, FY24. Results are yet to be declared by the telecom operators for Q1 FY25, but there won't be much growth at the moment, as the pricing was almost the same during the first quarter.
