Tariff playbook exhausted, telcos turn to data to boost ARPUs
India’s three private telcos in their latest earnings calls, have talked about data consumption’s role in ARPU numbers
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SIVAKUMAR PV
India’s telecom sector is entering a new phase of growth, with operators encouraging users to move towards premium data plans to boost average revenue per user (ARPU). With the impact of recent tariff hikes fully absorbed, analysts project data surge to be the next big lever for ARPU rise in India.
Last fiscal, the sector reported good operating profit and ARPUs largely due to the tariff hikes announced i the earlier part of the financial year. According to Everest Group data, Indian telcos averaged over 15 per cent ARPU growth compared to the 3-6 per cent rise reported by the European counterparts. Even American telecom companies averaged only 1-3 per cent.
“The next big driver for ARPU is going to be the premium data packs. All the unlimited 5G packs will drive it. People will upgrade wherever 5G is available but that trend will happen gradually by March 2026,” said Titus M, Practice Director at the Everest Group.
India’s three private telcos in their latest earnings calls, have also talked about data consumption’s role in ARPU numbers. Bharti Airtel specifically said that data consumption, aside from other trends like feature phone to smartphone and prepaid to postpaid upgrades, is central to ARPU growth in the absence of any tariff repair. Vodafone Idea (Vi) too talked about 10 per cent annual growth in data traffic and a 15 per cent consumer ARPU increase. Meanwhile, Jio talked about a multiple new use cases coming in terms of data consumption growth in the form of JioPCs, etc.
Rising data consumption
Building on this approach of the three major players in telecom, Anand Kulkarni, Director at Crisil Ratings, said, “ARPU is expected to climb to ₹220-225 this fiscal from ₹205 last fiscal, largely on account of rising data consumption. Wider availability of 5G network, with penetration expected to touch 45 – 47 per cent by March 2026, is fuelling data consumption for applications such as social media, video streaming, gaming, generative artificial intelligence and digital marketing.”
Kulkarni’s confidence was led by company projections of an increase in data usage to 31-32 GB in the current fiscal. He also noted that telcos have been rebalancing their offerings by reducing plans with low data limit or offering 5G services only on plans offering higher data limit. This trend is expected to move consumers to premium plans, boosting telco ARPU, he said.
Similarly, Axis Securities too said that premium plan adoption, increased data consumption, and rational pricing discipline will drive ARPU gains. Subscriber growth in rural and underpenetrated areas is expected to add incremental volumes. Another opportunity lies in the enterprise segment, set to benefit from 5G deployments, cloud-edge partnerships and integration of AI into their digital platforms. Vi’s new CEO Abhijit Kishore asserted a bullish sentiment on the segment during the last earnings call.
“Overall, FY26 will be a year of 5G monetisation, margin expansion, and stronger cash generation for the major players in this sector. The Indian telecom industry is showing strong data consumption, and demand for data continues to accelerate,” said Axis Securities in its report, stressing data’s significance as the prominent lever to lead ARPU growth.
Published on August 19, 2025
