The general public may once again face inflationary shocks. This time telecom companies can give this shock. A report says that telecom companies may increase their tariff plans by 12 to 15 percent in the next 4 to 5 months. This means that common people may have to spend more money for their mobile recharge plans.

According to a report by Centrum Institutional Research, tariffs in India’s telecom sector may increase by another 12-15 percent in the next four to five months. According to the report, the environment has become more favorable for price increases after market consolidation. The report said that with only 3+1 players in the market, the environment has become more favorable for price hikes and we expect a 12-15 percent increase in tariffs in the next 4 to 5 months.

On the financial side of the telecom sector, the average revenue per user (ARPU) of the three telecom operators – Bharti Airtel, Reliance Jio and Vodafone Idea Ltd (VIL) – is expected to grow by around 0.8-2.0 per cent quarter-on-quarter (QoQ) in Q2FY27. This growth can be attributed to migration from 2G to 4G/5G, increase in number of postpaid customers and more days in the quarter. The report also said that Bharti Airtel and Reliance Jio will continue to gain customer market share at the expense of VIL.

How much can the number of customers increase?

Reliance Jio is expected to add around 8 million subscribers quarter-on-quarter (QoQ), while Bharti Airtel is expected to add around 3 million Indian wireless subscribers quarter-on-quarter, Centrum reported. We expect VIL to add around 1.0 million customers in the quarter, the report said. Data consumption per customer will remain strong due to increasing use of 4G/5G networks.

The report emphasizes the growth of network coverage across the sector. It is said that Reliance Jio and Airtel have provided 5G service in more than 95 percent of the districts and their focus is on adding more 5G devices to their networks. At the same time, VIL’s 5G network is present in around 200 cities and is expanding its 5G coverage.

The report said that VIL Rs. 250 billion debt fund is actively in talks with banks to complete the process. For FY27E-29E, it will have its Rs. This is required under the 450 billion capex (capital expenditure) programme. Reliance Jio and Airtel are also getting good response in terms of adding 5G FWA and fixed broadband.

Growth potential of companies

1. For Reliance Jio, the report estimates an increase of 8 million subscribers quarter-on-quarter, taking the total to 541 million. Also, ARPU is likely to increase by 1 percent quarter-on-quarter to Rs 218 per month.
2. The growth is due to the addition of 5G FWA and more days in the quarter, which led to an estimated 2.6 percent increase in quarter-on-quarter (QoQ) revenue.
3. It is expected that Bharti Airtel’s customer base will increase by three million (3 million) to 38 crore (380 million) in the quarter.
4. Also, due to ongoing migration from 2G to 4G and number of days in the quarter, ARPU increased by 2.0 percent month-on-month to Rs. 269, which is the highest in the industry. The company’s revenue is expected to grow by around 3.1 percent quarter-over-quarter.
5. Vodafone Idea subscriber base is estimated to grow by one million (1 million) quarter-on-quarter to 19.4 crore (194 million), with blended ARPU up around 0.8 percent quarter-on-quarter to Rs. 178 has happened.
6. Management’s commentary on VIL’s capex (capital expenditure) performance and fundraising progress will be closely watched.

Also keep an eye out for Indus Tower and Tata

Apart from these three telecom companies, Indus Towers’ revenue is expected to grow by around 1.7 percent quarter-on-quarter, the report said. This growth will be driven by increased capitalization due to VIL’s focus on increasing coverage/capacity and 1.5 per cent quarter-on-quarter increase in the number of co-locations. Tata Communications’ revenue is expected to grow 1.6 percent in the quarter, supported by better performance in the services of digital platform and data segment. EBITDA margin is expected to increase by around 61bps quarter-on-quarter to 19.3 percent.