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India's telecom sector is set for steady growth in Q4FY26, supported by rising average revenue per user (ARPU), strong subscriber additions by market leaders, and a favourable pricing environment, according to a report by Centrum.
The report highlights that "rising ARPU to drive performance of Telcos," with operators expected to post "~1% QoQ increase in ARPU led by 2G to 4G/5G migration and postpaid addition." The report noted, market dynamics remain tilted in favour of larger players, Bharti Airtel and Reliance Jio would continue to gain subscriber market share at the expense of Vodafone Idea. Reliance Jio is projected to add around 5 million subscribers sequentially, while Bharti Airtel may add about 6.5 million users. In contrast, Vodafone Idea is expected to continue losing customers, with the report noting it may lose 1mn customers QoQ. Data consumption trends remain robust, with the report stating that data usage per customer would remain robust, led by growing penetration of 4G/5G network, as both Jio and Airtel expand their 5G footprint across over 90 per cent of the districts. The sector's pricing outlook is also improving. According to the report, the pricing environment has become more favourable with only four players in the market and another round of tariff hikes is likely, with expectations of a "12-15% tariff hike by July'2026." Additionally, growth opportunities are emerging from newer segments, with telecom majors witnessing "strong traction in terms of 5G FWA and fixed broadband addition," driven by low penetration in these areas. Among companies, Bharti Airtel is expected to maintain industry-leading ARPU, while Reliance Jio's growth will be supported by 5G FWA expansion. Meanwhile, Vodafone Idea's performance will hinge on fund-raising and capex execution, with "management commentary on their ongoing capex activity and fund raise program... keenly watched." Overall, the report maintains a positive stance on the sector, stating that the focus on ARPU expansion and improving return ratios will remain key drivers. It adds that "we maintain status quo on all ratings," with preference for Bharti Airtel and Indus Towers among telecom players. (ANI)
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