If you are an avid follower of the Indian telecom industry, you must have heard this term - ARPU, which stands for average revenue per user, come up a lot. The telcos use this term frequently, and even the investors in the telecom companies keep a tight eye on their ARPU figures. ARPU is nothing but an average of how much a telco earns from each of its customers. The higher the ARPU, the better would be the revenues. In Q3 FY23, ICICI Securities estimates that the ARPU growth for the Indian telecom players would decelerate. This would be because the telcos didn't hike the tariffs this time for their mobile customers.
Airtel, Jio and Vi ARPU Estimate for Q3 FY23
According to a recent report from ICICI Securities, Airtel's ARPU may grow 2% QoQ to Rs 194, while Jio's ARPU is likely to remain flattish at Rs 177 levels. Vodafone Idea's ARPU may be up by 2.5% at Rs 134. The ARPU growth for the telecom players is decelerating because of delays in the premiumisation of services.
Airtel would still reach very close to its short-term ARPU target figure of Rs 200. However, the ARPU concern for Jio is there. While the telco has the most active subscribers in India, its ARPU is not as good as Airtel's. Further, the ARPU growth for Jio would seem to come under a flat trend without tariff hikes. Amongst the private telcos, Jio has the most affordable tariffs, and that is why its ARPU is always behind Airtel's ARPU figure.
The Indian telecom operators are expected to hike tariffs later this year. It was highly anticipated that the telcos would increase tariffs by the end of FY23. Also, Airtel and Vodafone Idea (Vi) have time and again said that they are not afraid to hike tariffs as the current tariffs are unsustainable for their business.