06-Jan-2025, 12:55 PM
Major telecom carriers are projected to see a 5% to 6.5% increase in average revenue per user (ARPU) for the third quarter of the financial year 2024-25, according to recent reports. This anticipated growth follows significant tariff hikes implemented by leading telecom operators, which have positively impacted their revenue metrics.
The increase in ARPU is attributed to the recent adjustments in pricing strategies by major players such as Bharti Airtel, Reliance Jio, and Vodafone Idea. These companies raised their tariffs by up to 25% in late 2024, a move aimed at improving profitability amidst rising operational costs and competitive pressures. The latest data indicates that the ARPU for these operators has already shown a notable rise, with Airtel leading at approximately Rs 233 per month, followed by Jio at Rs 195 and Vodafone Idea at Rs 15614.
The Telecom Regulatory Authority of India (TRAI) reported that the overall mobile ARPU rose significantly from Rs 157.45 in June 2024 to Rs 172.57 by September 2024, marking a year-on-year increase of 15.31%1. This upward trend is expected to continue into Q3, driven by the full absorption of the recent tariff hikes and an ongoing shift of subscribers from lower-tier plans to more lucrative postpaid options.
Additionally, analysts predict that the telecom sector’s consolidated revenues could increase by approximately 12-14%, reaching between Rs 3.2 lakh crore and Rs 3.3 lakh crore for FY2025, largely fueled by these tariff adjustments. The growth in ARPU is also seen as a response to the ongoing migration of users from 2G to 4G services, which is enhancing data usage and overall revenue generation.
Despite the positive outlook on ARPU and revenue growth, the industry has faced challenges such as subscriber losses due to SIM consolidation following tariff increases. For instance, Bharti Airtel and Reliance Jio reported significant subscriber declines in previous quarters as users adjusted their plans in response to higher prices. However, experts believe that this trend will stabilize as market dynamics evolve and competition among operators continues.
In summary, the telecom sector is poised for a robust performance in Q3, with expected ARPU growth reflecting strategic pricing adjustments and shifting consumer behaviors. As operators adapt to these changes, their financial health is likely to improve, positioning them for further growth in the coming quarters.
