According to a report by HSBC, average revenue per user (ARPU) for Indian telecom operators is expected to increase by 13-15 per cent in financial year 2026-27 (FY27), supported by potential headline tariff hikes later in the year.
Analysts said ARPU growth will be driven by continued rise in data consumption and an ongoing shift of subscribers towards higher-value plans, indicating that operators are prioritising monetisation of usage rather than aggressive subscriber acquisition.
The report highlighted that the expected tariff revisions also reflect sustained pricing discipline among private telecom players, suggesting a structurally aligned industry focus on improving returns after years of balance sheet stress and heavy network investments. For operators such as Bharti Airtel Limited and Reliance Jio Infocomm Limited, analysts expect earnings growth to be primarily supported by rising ARPU, expanding home broadband bases and stronger free cash flow generation over the medium term.
Meanwhile, Vodafone Idea Limited’s (Vi) outlook has improved marginally following relief on its adjusted gross revenue dues, which have been frozen at Rs 876.95 billion as of December 31, 2025, with payments deferred to later years. This is seen as easing near-term financial pressure and improving the likelihood of India continuing as a three-private-player telecom market.
However, the brokerage said the relief does not materially strengthen Vi’s competitive position. It expects Airtel and Jio to invest $14-16 billion over the next three years, significantly higher than Vi’s planned $5.9 billion (around Rs 450 billion) capital expenditure.
Consequently, Vi is likely to focus on stabilising its subscriber base rather than regaining market share. Its subscriber share is projected to stabilise in the mid-teens in the coming years, as network investments may help curb churn but are unlikely to drive substantial net additions.
The report added that financial constraints remain a key challenge for the operator, given upcoming spectrum payment obligations and the need for stronger operating cash flows and possible external funding to meet commitments while continuing network investments. Future spectrum renewals later in the decade could further increase capital requirements.
