According to India Ratings and Research (Ind-Ra), the telecom sector will require an additional average revenue per user (ARPU) of around Rs 35 to Rs 40 to reach a return on capital employed (ROCE) target of 15 per cent. The ratings agency stated that this would require ARPU growth of 15 to 20 per cent from current levels. Without tariff increases, such growth is expected to take time, as organic ARPU expansion is likely to remain at about 5 per cent.
While maintaining a neutral outlook for the telecom sector for financial year 2026-27, the agency noted that operators’ ROCE is improving due to lower capital expenditure intensity and better profitability. It also highlighted that mobile fixed wireless access is expected to remain a key driver for growth in non-mobile broadband subscribers. Over the past few months, non-mobile broadband subscriber additions have already crossed 75 per cent, as recorded in December 2025.
Ind-Ra further expects capacity expansion, strong demand and a supportive regulatory environment over the next 12 to 18 months to benefit telecom equipment suppliers and service providers, thereby supporting their revenue growth.
