The industry’s wireless ARPU is likely to grow at around 12 per cent CAGR over FY26–28, driven by regular tariff hikes and multiple premiumisation strategies
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PRASHANT NAKWE
Brokerage firms expect India’s telecom companies to begin FY27 on a stable note, with the first quarter reflecting a 5 per cent year-on-year (Y-o-Y) increase in ARPU, driven by premiumisation initiatives and subscriber growth.
On a sequential basis, brokerages estimate the average revenue per user (ARPU) to grow by 1.5 to 2 per cent, owing to ongoing subscriber upgrades, an improved subscriber mix and the presence of one additional day in the quarter. No analyst reports were readily available for Jio Infocomm, as all major brokerages are associated with the company as merchant bankers for its proposed IPO.
“The industry’s wireless ARPU is likely to grow at around 12 per cent CAGR over FY26–28, driven by regular tariff hikes and multiple premiumisation strategies,” said JM Financial Institutional Securities.
Bharti Airtel’s premiumisation benefits, including 4G to 5G upgrades, higher postpaid subscriber additions and data monetisation, are expected to increase ARPU by 4.8 per cent YoY to ₹262, according to ICICI Securities. Meanwhile, Vodafone Idea’s ARPU could outperform with a 7.2 per cent year-on-year increase to ₹177.
Revenue growth
In terms of revenue, Airtel is expected to report 2-3 per cent quarter-on-quarter (q-o-q) growth in wireless revenue/EBITDA, driven by robust mobile broadband performance, subscriber gains of around 4 million, healthy overall wireless subscriber additions of 3.3 million and a likely 1.5 per cent improvement in ARPU to ₹261. Vodafone Idea’s revenue is also expected to grow by 1.8 per cent sequentially to ₹115 billion.
Tata Communications’ revenue is set to grow 12.3 per cent y-o-y, driven by its digital portfolio and supported by the depreciation of the Indian rupee against the US dollar.
“Revenue growth, slowed capex, and rising network utilisation should help continue margin uptick; we expect wireless EBITDA margins to expand 10-50 bps QoQ,” said Axis Capital in its research note.
Tariff hike
Brokerages have flagged improved visibility of a 12–15 per cent tariff hike over the next 3-6 months, as global inflationary concerns ease, coupled with the government’s intent to ensure a ‘3+1’ player market structure and the industry’s requirement to improve return on capital employed (RoCE) amid limited avenues to monetise substantial 5G investments.
“Potential repair of the industry tariff structure to a ‘pay as you use’ model is also likely to aid ARPU growth in the long term. Moreover, the potential 5G monetisation and FWA rollout provides significant upside risk over the long term,” said JM Financial.
Morgan Stanley estimates an even higher tariff hike of 16-20 per cent in November-December 2026. In the meantime, it expects the non-mobile business to grow faster. The report estimated 33 per cent revenue growth on an annual basis and 4.5 per cent sequential growth in the home segment, led by strong fixed wireless access (FWA) subscriber additions. It also highlighted growth picking up in the Enterprise business by around 3.5 per cent on a quarterly basis, supported by the continued scale gains in cloud and other business solutions. Other growth avenues include the DTH business, driven by IPTV solutions.
“Non-mobile businesses should report 16 per cent year-on-year EBITDA growth in Q1. Going forward, non-mobile businesses are expected to grow faster than mobile businesses, with an estimated revenue CAGR of 19 per cent F26-29e, compared with a 12 per cent CAGR for the Indian mobile business,” said the Morgan Stanley research note.
Published on July 5, 2026
