According to Crisil Ratings, Indian telecom operators’ operating profit (earnings before interest, taxes, depreciation, amortisation, and rent) (EBITDAR) is set to rise 12-14 per cent year-on-year to nearly Rs 1.55 trillion in financial year 2025-26 (FY26), driven by higher data consumption and an increase in average revenue per user (ARPU).
EBITDAR grew approximately 17 per cent to Rs 1.4 trillion in FY25, aided by tariff hikes. ARPU is projected to rise further to Rs 220-225 in FY26 from Rs 205 in FY25, as telcos phase out low-data plans and bundle 5G services with higher-value packs. With around 60 per cent of costs fixed, this will directly boost profitability.
Further, Crisil expects 5G penetration to climb from 35 per cent in FY25 to 45-47 per cent in FY26, pushing monthly data usage up to 31-32 GB from approximately 27 GB. Rising rural internet penetration and migration to data plans will further support ARPU growth.
The operating profit expansion will also lift free cash flows to about Rs 700 billion this fiscal, much of which will likely be deployed for debt reduction.
