According to analysts from BNP Paribas and Jefferies, India’s telecom sector reported 11 per cent year-on-year (YoY) revenue growth in the second quarter (Q2) of fiscal year 2025-2026 (FY26), marking a slowdown as the gains from previous tariff hikes begin to taper. This shift has pushed Reliance Jio and Bharti Airtel to broaden their focus toward home broadband, data centre (DC) infrastructure and international technology offerings, even as the industry awaits its next round of price revisions.
Further, the sector is entering a phase of softer expansion after a year of strong tariff-led momentum. Quarterly revenue growth has eased from an average of 15.3 per cent to 11 per cent in the Q2 of FY26.
With mobile services showing signs of saturation, operators are accelerating diversification. Both Jio and Airtel are eyeing 100 million households for broadband penetration, while stepping up investments in fixed wireless access (FWA) and DCs. Jio’s home broadband subscriber base has risen to 23 million compared to Airtel’s 12 million, and its FWA users have reached 9.5 million versus Airtel’s 2.3 million.
Additionally, Jio is expanding into the global telecom technology market, which Jefferies values at $121 billion annually. The company has built what the brokerage terms a full-spectrum 5G technology stack covering radios, core network components and cloud-native operating platforms, all proven at scale with over 200 million users. Jio Platforms has also increased its technology-led initiatives, with patent filings multiplying 13 times and patent grants rising fourfold in the past two years. Its contributions to third generation partnership project (3GPP) standard-setting for 5G/6G have also climbed nearly sevenfold to 70.
Furthermore, the sector added nearly 9 million SIM users in Q2 FY26. Jio contributed 8 million net additions, while Vodafone Idea Limited (Vi) saw a decline of 1 million. Sequential revenue growth improved to 2.7 per cent from 2.4 per cent, aided by an additional day in the quarter and an improved customer mix as operators promote content-led bundles and postpaid upgrades.
Airtel also continued to lead in average revenue per user (ARPU) at Rs 256, ahead of Jio’s Rs 211, with both operators seeing sequential gains. Data usage surged with the ongoing transition to 5G, pushing industry-wide data consumption up 28.2 per cent YoY, although quarter-on-quarter (QoQ) growth softened once the cricket season concluded. Jio now commands 65 per cent of India’s 5G subscriber base and 75 per cent of the FWA market.
Lastly, both operators have largely wrapped up their 4G and 5G rollout cycles, resulting in a decline in capital expenditure intensity.
