According to a report by ICICI Securities, telecom operators in India are expected to raise tariffs by around 20 per cent in financial year 2026-27 (FY27). The agency had previously projected a hike in the second quarter (Q2) FY26 but has now deferred its expectations to FY27.
The report assumes a steady 2 per cent annual growth in subscriber base and models just one significant tariff hike in FY27 across all user categories, with no further major increases projected beyond that.
As per the report, the telecom industry’s adjusted gross revenue (AGR), including national long distance (NLD), will grow at a compound annual growth rate (CAGR) of 9.8 per cent from FY25 to FY30, reaching Rs 4,274 billion by the end of the forecast period. The report also expects market share among operators to remain largely stable, with each private telco gaining 10-50 basis points in AGR (including NLD) share by FY30.
Further, fixed broadband revenues are projected to expand at a 15.4 per cent CAGR during the same period, with Reliance Jio and Bharti Airtel expected to capture the largest share of this fast-growing segment.
Private telecom companies are likely to maintain flat or slightly reduced capital expenditure, which will help boost free cash flows. These funds may be redirected toward shareholder returns through dividends or share buybacks, the report noted.
On satellite communications (satcom) front, ICICI Securities said that while companies like Starlink are investing heavily in fixed broadband services, their direct-to-consumer mobile services are more supplementary and unlikely to disrupt the Indian market significantly during the forecast window.
Furthermore, the report highlighted growing pricing power among telcos, driven by increased service consumption. From FY17 to FY25, voice usage grew at a CAGR of 12.6 percent and data usage surged by 37 per cent. On average, users now spend over three hours a day on mobile. Unlike in earlier years, current market dynamics show low risk from new competitors, further consolidating pricing strength.
ICICI Securities concluded that with increasing usage and minimal competitive threat, Indian telcos are well-positioned to sustain strong pricing power going forward.
