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* FY26 was a steady year for the private telcos, with combined wireless revenue rising ~10% YoY to INR2.7t, although this represented a slowdown from ~13% YoY growth recorded in FY25. The revenue growth in FY26 was largely driven by ~8.5% YoY growth in wireless ARPU (partial benefit of Jul’24 tariff hike and subscriber mix improvements), while consumer wireless subs inched up ~2% YoY. However, with the benefits of the tariff hikes now in the base, the wireless revenue growth moderated to ~7% YoY in 4QFY26, and in the absence of a tariff hike soon, we believe the wireless revenue growth for private telcos could remain subdued over the next few quarters. Historically, we have observed that industry leaders’ wireless revenue growth moderating to single digits YoY has been a precursor to the next round of tariff hikes. We continue to build in ~15% smartphone tariff hike (~INR50/28 days for the base 1.5GB/d plan) from 2QFY27, which should lead to ~11% YoY growth in combined wireless revenue for private telcos to INR3t in FY27. However, we note there could be potential delays in tariff hikes due to rising inflationary pressures on household budgets.

* With more than 50% of RJio’s subscribers now opting for 5G, we believe the free unlimited 5G offerings, which act as a headwind to data monetization, should stop, and telcos should start monetizing higher data consumption on 5G. Further, we believe that beyond the next tariff hike, telcos need to rework the pricing architecture to monetize the secular 20%+ YoY growth in data consumption. We believe a change in tariff architecture could drive higher growth for telcos. Our preferred picks remain Bharti Airtel, Bharti Hexacom, and RIL.

Consumer wireless net adds recover in FY26, though the base still below FY17 levels

Normalized for the growth in machine-to-machine (M2M) SIMs, the industry consumer wireless subscriber base grew ~17m in FY26 (vs. ~17m net decline in FY25). However, despite the modest recovery in FY26, the consumer wireless subscriber base at 1,142m is likely still lower than Mar’17 levels (1,170m with limited M2M SIMs). The key reason for the decline in industry subscriber base has been the spike in smartphone tariffs (2x since Nov’19), and the introduction and subsequent sharp hikes in minimum recharge packs (currently INR199/28 days vs. lifetime free incoming before 2HCY18), which led to SIM consolidation and likely deactivations (at the lower end).

Among private telcos, RJio extended its lead with ~15m consumer wireless net adds (vs. ~26.5m reported wireless net adds including M2M) in FY26, followed by ~11m net adds for Bharti. Vi lost ~10m net consumer wireless subs in FY26 (vs. a reported net decline of ~5m, which includes the growth in M2M SIMs). RJio extended its lead on consumer wireless subscriber market share by ~75bp YoY to reach ~41.5%, while Bharti gained ~45bp YoY to achieve 35%+ market share. Vi’s market share plunged by a further ~115bp YoY to 15.7% in FY26.

Quality of the subscriber base continues to improve

Despite virtually no growth in consumer wireless subscribers since FY17, the quality of the subscriber base continues to improve, with the share of subscribers opting for data rising consistently. Compared to ~18m reported consumer wireless net adds for the three private telcos, the data-opting subscriber base grew ~31m YoY to reach 889m in FY26 (excl. M2M SIMs), with the share of data subs improving to ~87% of the base (up ~150bp YoY). Upgradation from non-data to data has been a key driver of ARPU growth in the absence of a headline tariff hike. Bharti was the biggest gainer of subscriber mix-upgradation with ~18m data net adds, as ~80%+ of its reporting paying subs base now opts for data. Excluding the growth in M2M base, Vi continued to lose consumer data subs with ~2.5m YoY net decline, even though the share of data subs in its mix improved ~185bp YoY to ~67%

Wireless revenue growth moderates to high single digits towards end-FY26

The combined wireless revenue grew ~10% YoY to INR2.7t, although this represented a slowdown from ~13% YoY growth recorded in FY25. The revenue growth in FY26 was largely driven by improvement in wireless ARPU (partial benefit of the Jul’24 tariff hike and subscriber mix improvements), while consumer wireless subs inched up ~2% YoY. However, with the benefits of the tariff hike now in the base, the wireless revenue growth moderated to ~7% YoY in 4QFY26, and in the absence of a tariff hike soon, we believe the wireless revenue growth for private telcos could remain subdued over the next few quarters. Historically, we have observed that industry leaders’ wireless revenue growth moderating to single digits YoY has been a precursor to the next round of tariff hikes. We continue to build in ~15% smartphone tariff hike (~INR50/28 days for the base 1.5GB/d plan) from 2QFY27, which should lead to ~11% YoY growth in combined wireless revenue for private telcos to INR3t in FY27. However, we note there could be potential delays in tariff hikes due to rising inflationary pressures on household budgets.

Vi continues to lose consumer wireless subscriber market share in FY26

The way in which the three private telcos report their subscriber base also varies compared to TRAI’s reporting. RJio and Vi include M2M SIMs in their overall subscriber base, while Bharti doesn’t include M2M SIMs in its reported wireless subscriber base; rather, it accounts for M2M SIMs in the Enterprise segment. Further, Bharti and Vi follow a more stringent 30-day active subscriber criterion (revenue generation in the last 30 days) when reporting their subscriber base vs. the 90-day active subscriber criterion followed by TRAI. We normalize the reported subscriber base by the three private telcos for the M2M SIM additions to arrive at the following conclusions:

* The three private telcos added ~18m consumer wireless subs on a reported basis (vs. ~16m as per TRAI reporting) in FY26.

* RJio added ~15m net consumer wireless subscribers (vs. ~27m on a headline basis including M2M), followed by ~12m for Bharti. Vi lost 8.7m paying wireless subs (excl. M2M) in FY26 to reach ~173m subs.

* Among the three private telcos, RJio extended its subscriber market share leadership with ~70bp YoY increase to reach 46.5%, followed by Bharti (+50bp YoY) at 36.6%. Vi lost another ~120bp YoY, with its share declining to ~17%.

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