Indian Telecom Revenue to Grow 10-12% in FY2026; ARPU to Hit Rs. 220: ICRA
The Indian telecommunications industry is set to witness a strong 10-12% growth in operating income in FY2026. Industry revenues are expected to be Rs. 3.5-3.7 lakh crore with an OPBIDTA of Rs. 1.7-1.9 lakh crore for FY2026, driven by recent and upcoming tariff hikes, according to ICRA’s latest projections.
The latest tariff hikes have already pushed ARPU beyond Rs. 200 in FY2025, with further growth expected to around Rs. 220 in FY2026. Another round of tariff increases later this fiscal year will provide additional momentum. The sector has frontloaded its 5G investments in FY2024 and FY2025, and capex intensity is now likely to decline. However, industry debt is estimated to peak at Rs. 6.6 lakh crore by March 2025 before gradually easing.
The telecom sector has frontloaded 5G investments in FY2024 and FY2025, with capex intensity now expected to decline. However, industry debt is projected to peak at Rs. 6.6 lakh crore by March 2025 before easing as capex reduces. Industry capex expected to be around Rs. 3 lakh crores over the next 4-5 years, thus keeping the total debt elevated. The total debt is estimated to increase to around Rs. 6.6 lakh crore as on March 31, 2025, before witnessing a steady moderation. The industry’s debt/OPBIDTA is likely to remain at 3.9 4.0x and interest coverage at 3.3x for FY2025, with hopes of further improvement, going forward.
While satellite communication is emerging as a potential competitor, ICRA believes it will primarily complement terrestrial networks in the medium term, particularly in remote and difficult terrains. Given its higher costs, satellite services are unlikely to disrupt mainstream telecom services in the near future.
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