Without tariff hike, telcos’ growth eases to six-quarter low

During the third quarter of 2025-26, the telecom operators’ revenue rose 2% quarter-on-quarter and 9% year-on-year to ₹72,700 crore. The growth is lower than the double‑digit expansion seen during the previous five quarters as the tariff hike benefits are now fully behind, brokerage house BNP Paribas said in an 11 February note.

“Mobile capex is moderating for Jio and Airtel. Both companies are channelling new capex into home broadband, enterprise services, and data centres, opening new avenues for growth. A further tariff increase later this year remains our base case,” the brokerage said in the note.

Price repair

Telecom operators are currently divided on tariff hikes. Reliance Jio has clearly stated that it has no immediate plans to increase mobile phone tariffs. In fact, it has signalled confidence in organic growth in its average revenue per user (Arpu), driven by rising 5G usage.

“We are quite happy with the traction—1% (quarterly) increase in Arpu. Over the last year, it has gone up by almost 5-5.5%. We have certain handles to improve the Arpu while contributing more value to the customers, and that’s what we will continue to focus on,” Anshuman Thakur, head of strategy at Reliance Jio, said during an earnings call with analysts in January.

Jio Platforms, parent of Reliance Jio, is looking at an exchange listing in the first half of 2026.

Bharti Airtel and Vodafone Idea, meanwhile, have been calling for a tariff revision to improve returns on investment. “Any pricing intervention is a call of a leader, not a call of a challenger. We have always maintained that the industry needs a price repair. We will wait for the leaders to take a call on that, and then we will evaluate,” Abhijit Kishore, chief executive of Vodafone Idea, said in an analyst meeting in January.

Analysts said Vodafone Idea would need tariff hikes to reach its 3x Ebitda target of about ₹30,000 crore over the next three years. Ebitda is short for earnings before interest, taxes, depreciation, and amortization.

“Awaited is the next sector tariff hike and Bharti leads our picks with 12-14% CAGR (compound annual growth rate) in India mobile revenue/Ebitda,” said brokerage house CLSA in a note dated 10 February.

When telecom operators raised tariffs in July 2024 after a gap of over two years, it was Reliance Jio that led with a 12-25% price hike. Post that, in 2025, the telecom operators also phased out their entry-level plans.

Digital services

With regard to Arpu, a key metric for telecom operators, Jio and Airtel posted a modest 1.1% on-quarter growth to ₹213.7 and ₹259 per month, respectively. Vodafone Idea’s Arpu grew 3% sequentially to ₹172 a month.

Bharti Airtel’s Arpu reached ₹259 and is 21% higher than Reliance Jio, even as the latter includes enterprise and homes revenue from fibre-to-the-home (FTTH) and 5G FWA (fixed wireless access), according to CLSA.

The industry added 10 million subscribers during the quarter, up 3.7% on-year and 0.9% on-quarter. Subscriber addition for Jio was strongest at 1.8% on-quarter, followed by Airtel at 1.2%, while Vodafone Idea lost 1.9% of its subscribers. As of December end, the subscriber base for Jio was at 515 million, which includes 13.5 million fibre homes and 11.5 million 5G/unlicensed band radio (UBR) FWA, CLSA estimates showed.

In comparison, Airtel’s mobile subscriber base grew to 369 million, and it added 1.2 million home subscribers, bringing its total to 13 million. Vodafone Idea’s user base was at 193 million as of December end. Notably, Vodafone Idea has talked about capex of ₹45,000 crore over the next three years to improve its network and achieve sustainable subscriber growth. The spending depends on the telecom operator’s pending fundraising from banks.

“Jio’s subscriber addition growth on-year has picked up pace in the last two quarters after trailing Airtel for the previous two quarters,” BNP Paribas said in the note.

5G subscribers for Airtel and Jio reached 181-253 million, 49-62% share of data subscribers. Vodafone Idea 5G service is now available in 43 cities across 17 circles.

Despite the slow growth, analysts believe India’s two largest telecom operators, Jio and Airtel, are well-placed to capture a significant share of the potential of India’s expanding digital services market.

The Indian consumer has been largely using telecom service providers for connectivity and content. “While we continue to see potential to further monetize these services, incremental opportunities would come from offering additional services to consumers,” analysts at BNP Paribas said.