A 15% tariff increase, initially expected by March 2026, is now likely to be postponed to December, as pressure on consumer sentiment—driven by elevated crude prices and global uncertainties stemming from tensions in West Asia—tempers near-term pricing moves. Analysts, however, suggest the delay is tactical rather than structural, with the fundamental drivers for tariff adjustments remaining firmly in place.
At the core of the argument is the ongoing need for pricing discipline in a capital-intensive sector.
“VI’s need for tariff repair and strategic share sales by Jio’s investors would be the drivers of biennial tariff hikes subsequently,” analysts from Ambit said. The expectation is that periodic increases will continue over the long term, as operators balance financial viability with affordability.
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ARPU Dynamics
Analysts added that rising data consumption, coupled with technological upgrades and biennial tariff hikes, could help grow average revenue per user (ARPU) at a 7% CAGR over FY26–42—slightly slower than the country’s nominal GDP growth.
“Tapping into home broadband connectivity and enterprise use cases by telcos would help drive telecom spend from the current 1.15% to 1.4% of FY42 GDP,” they added.
Policy support remains another key pillar. Recent government measures—including deferment of adjusted gross revenue dues, equity conversion of liabilities, and lower spectrum reserve prices—signal a clear intent to preserve a three-player market structure. This regulatory stance provides visibility on continued tariff hikes, even as potential taxes on data consumption appear unlikely, given the risk of political backlash.
Structural demand tailwinds further bolster the case. Rising data usage, driven by higher-quality video streaming and expanding 5G penetration, is expected to support revenue growth alongside tariff increases. At the same time, telecom companies are increasingly leveraging adjacent opportunities, such as home broadband and enterprise connectivity, to expand their revenue base over the medium term.
Subscriber Rebound
Subscriber trends indicate a stabilising demand environment. Industry data for January 2026 shows net wireless subscriber additions rebounding to 2.4 million, up from 1.5 million in December and 0.4 million in October. Reliance Jio and Bharti Airtel led additions with 1.6 million and 1.2 million users respectively, while Vodafone Idea continued to lose subscribers, albeit at a slower pace.
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In overall net additions, Airtel outpaced Jio with 4.4 million additions, compared with Jio’s 2.43 million. However, a significant portion of Airtel’s growth came from the machine-to-machine (M2M) segment, which has a lower Arpu.
Airtel added 3.2 million subscribers in the M2M segment, followed by Jio with 0.9 million and Vodafone Idea with 0.3 million, while BSNL lost 0.1 million. The industry’s M2M subscriber base rose by 4.3 million to 113.5 million in January 2026.
“Bharti Airtel continues to strengthen its leadership position, holding 61.8% of the M2M subscriber market (up from 61.3% in December 2025)… M2M subscribers earn a low ARPU of INR 10–30,” analysts from JM Financial noted.
Airtel added 3.2 million subs in this segment, followed by Jio’s 0.9 million and Vodafone Idea’s 0.3 million while BSNL lost 0.1 million. The industry’s M2M subs base increased by 4.3mn to 113.5mn in January 2026.
“Bharti (Airtel) continued to strengthen its leadership position with 61.8% M2M subs market share (61.3% in December 2025)…M2M subs earn a low ARPU of INR 10–30,” analysts from JM Financial noted.
The growth momentum extended to broadband. Jio added 0.78 million home broadband users during the month, supported by its fixed wireless access push, while Bharti Airtel added 0.62 million, sustaining its recent growth trajectory. Jio also retained a dominant position in the 5G fixed wireless segment with over 70% market share.
TOPICSTelecomThis article was first uploaded on March twenty, twenty twenty-six, at forty-seven minutes past nine in the night.