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India Telecom Sector Poised for Steady Growth Driven by Tariff Hikes and Stable Market
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CNBC TV18•21-10-2026, 09:35
India Telecom Sector Poised for Steady Growth Driven by Tariff Hikes and Stable Market
- •India's telecom sector is positioned for steady growth due to tariff hikes, customer upgrades, and rising broadband demand, according to Axis Capital.
- •Regulatory hurdles are largely behind the industry, leaving a stable market structure featuring two major players and one smaller competitor.
- •Bharti Airtel successfully translated previous tariff increases into higher average revenue per user, with ARPU projected to cross three hundred rupees in three years.
- •Rising smartphone prices due to chip and memory costs could slightly slow 2G to 4G and 5G upgrades, but the impact on ARPU is expected to remain limited.
- •Fibre broadband and fixed wireless access are emerging as new growth drivers, helping operators expand monetisation beyond traditional mobile networks.
Key Questions Answered
Axis Capital expects Bharti Airtel's average revenue per user (ARPU) to grow at a compound annual growth rate of roughly 7–8% over the next three years, potentially crossing ₹300.
Higher memory and chip costs make device upgrades more expensive, which could slow down the transition of users from 2G services to 4G and 5G, as some consumers may choose to keep using their current phones.
The telecom sector features a stable market structure consisting of two large players and a smaller third competitor. This benign competition, alongside consumer willingness to absorb tariff hikes and rising demand for broadband services, is driving revenue growth.
