Strong Growth Forecasted for Indian Telecom Sector

The Indian telecom industry is anticipated to experience a robust growth of 10-12% in operating income by FY2026, according to a report by ICRA released on Friday.

Revenue for this period is projected to reach Rs 3.5-3.7 lakh crore, with an OPBIDTA of Rs 1.7-1.9 lakh crore, fueled by both recent and forthcoming tariff hikes. These tariff hikes have already boosted the Average Revenue Per User (ARPU) beyond Rs 200 in FY2025, with expectations to further elevate it to Rs 220 in FY2026. ICRA predicts an additional tariff increase later in the fiscal year to bolster this momentum.

While the sector has heavily invested in 5G technology during FY2024 and FY2025, capital expenditure intensity is set to decrease. Industry debt is also expected to reach its peak at Rs 6.6 lakh crore by March 2025 before gradually subsiding. Additionally, even as satellite communication presents itself as a potential rival, it is likely to first serve as a supplement to terrestrial networks, mitigating its chances of disrupting mainstream telecom services in the near term.

(With inputs from agencies.)