Next Tariff Hike by Indian Telcos Expected in December 2025: Motilal Oswal

The Indian telecom operators have implemented tariff hikes thrice in the last five years. Once in 2019, then in 2021, and the last one very recently in July 2024. These three hikes have enabled the telecom industry’s average revenue per user (ARPU) figure to almost double from Rs 98 in September 2019 to Rs 193 in September 2024. Since the returns of the industry are still pretty low considering the investments and the data consumption levels of the customers, telcos will hike tariffs more frequently in the coming years to boost ARPU, said Motilal Oswal.

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The next hike could be very well planned for the last stage of calendar year 2025. According to an IANS report, Oswal said, “we expect tariff hikes to be more frequent. We build in 15 per cent tariff hike in December 2025.” Another hike would enable the telcos in boosting their ARPU levels to reach a very decent level of returns and would definitely push Airtel beyond the Rs 300 ARPU figure.

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Telecom Sector Revenues up 13% YoY in Q2 FY25

According to Oswal, the revenue of the telecom industry has grown 8% QoQ and 13% YoY to Rs 674 billion in Q2 FY25. This is mainly driven by the tariff hikes. The revenue growth is expected to continue for the telcos as the full impact of the tariff hike comes into place (this would take around two to three quarters).