Financial results from the first quarter (April-June 2024) indicate that the telecom services environment has indeed improved. The three major private operators are all generating operating profits with reasonable operating margins. Even the weakest, Vodafone Idea (Vi), has an operating margin of over 40 per cent. All three have implemented tariff hikes, which have been absorbed by subscribers. Reliance Jio continues to be the market leader in terms of revenue market share, subscriber additions (net 7.9 million) and transition to 5G (with around 22 million users moving to 5G, pushing its 5G subscriber base to 130 million). Jio’s ARPU has flattened at around Rs 182, though this may be a temporary effect of offering unlimited 5G plans to attract subscribers. Bharti Airtel has seen comparatively weaker subscriber growth (net 2.3 million) and has been affected by currency weakness in its African operations. However, it has completed most of its 5G roll-out in India, and the lower capex is resulting in better free cash flow. This is expected to increase substantially as capex drops further. Airtel remains the market leader in terms of ARPU, registering around Rs 211. Vi, of course, is the most vulnerable of the three private operators. It has managed to raiseRs 180 billion through an FPO and another Rs 20.8 billion through preferential equity issues. It is also hoping for a favourable outcome in the AGR appeal currently before the Supreme Court, which could reduce its dues by a substantial Rs 340 billion. Moreover, the possibility of converting debt to equity provides some leeway. Although Vi has increased its ARPU and expanded its 4G base, it is still in a precarious position. The company needs to secure more funding, accelerate its 5G roll-out and strengthen its 4G network. While Vi is precariously positioned, all three operators do need to significantly improve ARPU and generate new revenue streams to justify their capex. They have all made significant investments and will need to continue doing so. However, neither Airtel nor Jio have yet started to generate the expected returns from their 5G networks. Vi needs to roll out 5G, but in one sense, it has the largest potential upside among the three operators since 52 per cent of its users are not yet even on 4G. The market is looking for more calibrated tariff hikes, along with other favourable developments for the three operators. After years of volatility and a cycle where overcrowding was followed by the rapid collapse of multiple operators, the telecom market may finally be settling into a period of stability. The trend is towards consolidation, the return of pricing power and the promise of better times.