Telecom ARPUs to touch decade-high mark in FY26, says Crisil Research

Telecom companies in India are set to achieve a significant milestone with an expected Average Revenue Per User (ARPU) of US$ 2.69 (Rs. 225) in the upcoming fiscal year, marking a decade-high, according to Crisil Ratings. This projection reflects a robust 25% increase from 2023-24 levels, driven by recent tariff hikes and escalating data consumption amid the ongoing rollout of 5G technology.

Senior Director at Crisil Ratings, Mr. Manish Gupta, attributed this growth to telecom operators' substantial tariff adjustments of 17-19% and increased data usage fuelled by video streaming, social media, and online gaming. These factors have led to a notable uptick in ARPU as consumers opt for higher-value plans.

Per-user revenue is expected to bolster operating profitability and elevate the industry's Return on Capital Employed (RoCE) to about 11% by FY26, up from approximately 7.5% in FY24, signalling improved financial health. Crisil Ratings also anticipates a capital expenditure (capex) reduction for network expansion, which should help reduce debt burdens, enhance profitability, and strengthen overall credit profiles.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.