Summary:
India Ratings and Research (Ind-Ra) expects India’s leading telecom operators to achieve 5% ARPU growth without increasing tariffs, driven by rising data consumption and a growing base of higher-value broadband subscribers. Airtel currently leads the industry with an ARPU of Rs 275, followed by Jio at Rs 216 and Vodafone Idea at Rs 177. Meanwhile, 5G penetration has reached 40.3% within three years of launch, while the introduction of voice-only plans has supported a recent recovery in 2G subscribers. Despite the possibility of slower subscriber additions as the market matures, increasing data usage and migration to premium broadband services are expected to support telecom revenue and cash flow growth.
According to a research report from India Ratings and Research (Ind-Ra), established telecom operators in India could record a 5 per cent increase in average revenue per user (ARPU) without raising tariffs. The agency has examined two possible growth drivers: a greater proportion of broadband users generating higher ARPU and rising data consumption. Average monthly data usage per subscriber has climbed from 6-11 GB in FY19 (financial year 2018-19) to 21-69 GB at present. Ind-Ra believes these underlying market developments will continue to drive ARPU expansion in the short to medium term while contributing to a steady improvement in return on capital employed.
Separately, Motilal Oswal indicated that withdrawing unlimited 5G services could help accelerate ARPU growth in the near term, whereas Axis Capital projected an industry-wide tariff increase of 10-12 per cent over the coming six months. Bharti Airtel currently records the highest ARPU at Rs 275, followed by Reliance Jio at Rs 216 and Vodafone Idea at Rs 177. However, New Street Research pointed out that Jio follows a comparatively less stringent approach when defining its customer base.
In the broadband segment, Ind-Ra observed particularly rapid adoption of 5G services, with penetration across the industry reaching approximately 40.3 per cent within three years of its launch. This level is similar to that achieved in Taiwan and South Korea, although it remains below China’s penetration rate. The subscriber base for 2G services, which had witnessed a steady decline between 2023 and 2025, increased during August-September 2026 after operators introduced voice-only plans. However, it remains uncertain whether this recovery will continue. Although subscriber additions may slow as the market approaches maturity, higher data consumption and the shift towards premium broadband customers are likely to remain important factors supporting revenue expansion and cash flow generation.
