Telecom industry revenue is expected to climb 16-17% year on year in the March quarter of FY25, which might boost the performance of big private carriers Reliance Jio and Bharti Airtel, while Vodafone Idea (Vi) is expected to have fewer subscriber losses in Q4FY25. Both firms are likely to post significant subscriber growth now that the impact of SIM consolidation following the July 2024 pricing increases has subsided. “After headline price rises in July, telecom industry revenue growth increased to 14% on-year in Q2FY25 and 16% in Q3FY25, up from the modest 8-9% pre-tariff hike level.
The industry should be able to sustain the 16-17% on-year revenue growth in Q4FY25, helped by residual flow-throughs from the last rate hike coupled with substantial overall user gains as the SIM consolidation impact will have largely eased and further helped by more prepaid users who had ported out to BSNL returning bo the three private carriers,” Mayuresh Joshi, director (equity research) at the Indian unit of US-based William O’ Neil & Co, told ET earlier.
According to an ET Bureau study, the sector’s revenue growth in Q4FY25 is expected to be much better than pre-tariff rise levels of 8-9% yearly. Reliance Jio expects the tail-end impacts of the July rate rises, particularly among consumers on longer-duration packs, to result in significant revenue gains. Similarly, Bharti Airtel is likely to gain from substantial customer acquisition and an increase in mobile data bundled plan subscriptions, which are known to raise average revenue per user (ARPU).
Furthermore, global brokerage company CLSA expects the telecom sector to produce Rs 2,68,800 crore in FY25, up from Rs 1,65,600 crore in FY17 when Reliance Jio debuted its mobile broadband services. This expansion illustrates the revolutionary effects of competitive pricing and subsequent industry mergers.
According to industry analysts, the transition to mobile data bundled plans is a top priority for all private operators, as these plans generate greater ARPU than traditional voice services. Furthermore, BNP Paribas expects double-digit on-year revenue growth in the telecom industry through FY26, citing additional rate increases and client upgrades to bundled plans as key drivers. CLSA has estimated that Airtel, Jio, and Vi would face an extra 10% rate increase in the second half of FY26. This and increased 4G/5G penetration are predicted to drive compound annual revenue growth of 12% by FY27.
