According to a report by Centrum, the major telecom operators in the country are expected to report a 5-6.5 per cent quarter-on-quarter (QoQ) increase in average revenue per user (ARPU) in their upcoming results of third quarter (Q3) of financial year 2024-2025 (FY25). The report noted that this growth is attributed to the tariff hike implemented by the companies in July 2024. It suggested that the impact of SIM consolidation, which occurred following the tariff hike, is expected to subside by Q3 FY25.
The report also highlighted the improving pricing environment in the telecom sector is now dominated by three major players and one smaller operator. Reliance Jio is predicted to lose two million subscribers QoQ, while Bharti Airtel is expected to gain three million, and Vodafone Idea Limited is expected to lose nearly four million customers, indicating a struggle to maintain its subscriber base.
As per the report, the July 2024 tariff hike by major telecom companies reflects a shift towards improving ARPU and overall return on capital employed (ROCE). The rise in digital penetration and widespread adoption of 4G services is expected to support internet-based companies’ performance. In addition, the sector’s emphasis has gradually shifted toward profitability as operators look to capitalise on increasing digital adoption.
Moreover, report mentioned that despite some operator losses, data usage per customer remains strong due to the increasing adoption of mobile internet services. Jio and Airtel are expanding their 5G networks in India, with investors closely monitoring their progress.
