Indian Telcos to See Improved Operating Profits in FY26

Indian telecom industry will benefit from the rise in data consumption and wide reach of 5G in FY26. The telcos will see their operating profits (which are profits after deduction of expenses, but not taxes) rising in fiscal year 2025-26. This will be due to a rise in average revenue per user (ARPU) for the telcos and surging data consumption, Crisil Ratings said in a note.

• Make Telecom Talk My Trusted Source
• 
• 

During the last year, because of the tariff hikes, telcos saw their operating profits rising by 17%. However, this year, there have been no tariff hikes. But the telcos have been focused on removing the low data limit bundled plans and instead push uesrs to recharge with premium plans. The telcos are also trying to capitalise on the entertainment buzz by offering higher-end OTT (over-the-top) platforms bundled prepaid and postpaid plans.

Read More – Reliance Jio Removes Rs 249 Plan from Offerings

Anand Kulkarni, Director, Crisil Ratings said, “ARPU is expected to climb to Rs 220-225 this fiscal from Rs 205 last fiscal, largely on account of rising data consumption. Wider availability of 5G network, with penetration expected to touch 45 – 47% by March 2026 from ~35% as of March 2025, is fuelling data consumption for applications such as social media, video streaming, gaming, generative artificial intelligence and digital marketing.”

The telcos have also focused on rural expansion. With 5G’s wider reach and more affordable 5G phones in the market, users will be enticed to consume more data across the country. On top of this, for the telcos, there’s no more major spectrum purchase or renewals in the short-term. This means, their free cash flow will become healthier this year and in the coming ones.