Telecom ARPU growth trends in India FY26

India’s telecom ARPU is expected to maintain its upward trajectory in FY26, supported by rising 5G adoption, a richer subscriber mix, and rapidly increasing data usage. Analysts project ARPU for the sector to surpass ₹200 and reach approximately ₹220 by the end of the fiscal year.

Leading operators like Airtel and Jio are already reporting visible ARPU growth through premium plan upgrades, postpaid migrations, and growing adoption of high-value services such as Fixed Wireless Access (FWA). These trends highlight a structural shift in the industry and strengthen the investment case for high-quality telecom stocks.For investors exploring telecommunications stock opportunities or searching for the best telecom stock for FY26, a critical question remains: Will Indian operators finally deliver consistent, sustainable ARPU expansion?

After years of suppressed ARPU caused by price wars and hyper-competition, the market is now entering a period of pricing stability, premiumization, and digital service monetisation. This creates a strong foundation for predictable ARPU growth, steady subscriber expansion, and multi-year telco revenue growth across the broader telco sector. Given these tailwinds, ARPU has evolved from a mere performance metric into a major profitability catalyst. Investors evaluating any telecom sector stock are placing higher weight on its ARPU trajectory, digital strategy, and revenue mix.

Building exposure to fundamentally strong telecom players aligned with the ARPU upcycle may offer compelling long-term growth, especially as FY26 shapes up to be a structurally positive year for the entire sector.

Key Drivers Behind ARPU Growth in India

India’s ARPU expansion in FY26 will be driven by several strong macro trends that are reshaping the competitive landscape and revenue model of the telco sector.

1. Tariff Hikes

Telecom operators are gearing up for another round of tariff increases, which remains one of the most powerful triggers for ARPU growth. With market consolidation strengthening pricing discipline, even moderate tariff revisions can create meaningful revenue upside.

2. Premium Plan Adoption

Consumers are steadily upgrading to higher-value plans that include unlimited data, OTT bundles, productivity tools, and enhanced digital services. This shift toward premiumization directly boosts ARPU and improves the quality of revenue for leading operators.

3. 5G Rollouts

The continued rollout and monetisation of 5G services will play a pivotal role in elevating telecom ARPU over the next 12–18 months. As users adopt faster data plans and advanced digital applications, operators will benefit from significant ARPU growth.

4. Enterprise Services

B2B offerings such as cloud solutions, IoT deployments, SD-WAN, edge computing, and private 5G networks are becoming high-margin revenue streams. These enterprise services are set to accelerate telco revenue expansion and strengthen the profitability of the overall telco sector.

5. Consolidation of Market Share

With two dominant operators now holding over 70% of the subscriber base, the industry enjoys unprecedented pricing stability. This consolidated market structure supports sustained ARPU improvement and ensures long-term growth across the telco sector.

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Subscriber Growth vs Telecom ARPU: What FY26 Will Look Like?

For years, India’s telecom market experienced rapid subscriber growth but sluggish revenue expansion, largely due to ultra-low tariffs and aggressive competition. FY26 is expected to reverse this pattern in a meaningful way.

Instead of relying solely on new subscribers, operators will see telecom ARPU rise at a faster pace than fresh SIM additions. Subscriber growth will stay stable, but the real momentum will come from higher-value users, premium plan adoption, and early 5G monetisation. This means profitability can increase even without explosive user acquisition.This shift marks a pivotal transition for long-term investors evaluating telecommunications stock opportunities or building strategic positions in telecom stocks. The focus is moving from volume to value, making ARPU expansion a core signal of sector strength in FY26.

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How 5G Monetisation Will Boost Telco Revenue?

India’s 5G penetration is expected to surge past 220–250 million users by FY26, setting the stage for a powerful monetisation cycle across the telecom industry. This expansion will unlock several key growth levers. Premium 5G plans will fuel significant ARPU growth, as users shift to higher-value data packs and enhanced service bundles. With faster speeds and richer digital experiences, overall data consumption will climb sharply. At the same time, enterprise demand for 5G-driven solutions such as IoT, private networks, and edge computing will accelerate, contributing meaningfully to telco revenue expansion. Together, these drivers create a multi-layered uplift in telco revenue, making FY26 a crucial year for investors assessing any telecommunications stock. The operators that execute 5G monetisation effectively will be best positioned to capture long-term value in the evolving digital economy.

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Telecom Stocks Outlook: Who Will Lead ARPU Expansion?

Investors seeking the best telecom stock for FY26 must look beyond headline numbers and evaluate deeper structural strengths. Key factors include an operator’s scale in 4G and 5G networks, its ability to maintain pricing discipline, the share of high-margin B2B services in its portfolio, and the strength of its cash flows ahead of future spectrum investments.Operators that have built robust digital ecosystems and diversified service offerings are positioned to drive the strongest ARPU expansion. Their broader platforms not only enhance customer stickiness but also contribute to sustained telco revenue growth.

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Telco Sector FY26 Forecast: Revenue, Tariffs & Profitability

Analysts project FY26 to be a pivotal year for India’s telecom industry, marked by a clear shift toward profitability and financial stability. Expectations include ARPU expansion in the range of 12–18%, supported by tariff hikes anticipated after the elections.EBITDA margins are also forecast to improve by 150–250 bps, driven by operational efficiency and premium user upgrades. Additionally, capex intensity is likely to moderate as large 5G rollout phases conclude, enabling stronger operational cash flows.

These combined factors position the telco sector for a high-growth cycle, fueled by sustainable ARPU growth and expanding telco revenue growth across both consumer and enterprise segments.For investors assessing any telecom sector stock, FY26 presents a compelling opportunity to gain exposure to a more stable and profitable industry. Operators that capitalise on this momentum could emerge as the best telecom stock candidates for long-term portfolio strategies.

Conclusion

FY26 is shaping up to be a landmark year for telecom ARPU growth in India, driven by 5G monetisation, premium plan upgrades, and a more stable competitive landscape. As subscriber growth remains steady and operators strengthen their digital ecosystems, ARPU is expected to rise consistently, boosting profitability and long-term stability .With improved telco revenue visibility and disciplined pricing, the industry is entering a structurally stronger phase. For investors evaluating telecom stocks or seeking exposure to the evolving digital economy, FY26 offers a compelling opportunity to tap into the next wave of sustainable telecom growth.

Frequently Asked Questions

1. How is ARPU expected to grow for Indian telecom companies in FY26?

In FY26, ARPU for Indian telecom companies is expected to rise 12–18%, driven by tariff hikes, premium plan adoption, and 5G monetisation. Higher-value users and growing enterprise services will further accelerate ARPU growth, improving profitability and strengthening telco revenue across the telecom sector.

2. What factors are driving ARPU improvement across telecom operators?

Key factors driving ARPU improvement across telecom operators include tariff hikes, adoption of premium plans, growing 5G usage, and expansion of high-margin enterprise services like IoT and cloud solutions. Combined with stable subscriber growth, these trends are boosting telecom ARPU and contributing to stronger telco revenue growth in the telecom sector.

3. Will tariff hikes continue to push ARPU higher in FY26?

Yes, tariff hikes are expected to continue in FY26, supporting sustained ARPU growth. Coupled with premium plan adoption and rising 5G usage, these price adjustments will strengthen telecom ARPU and enhance overall telco revenue growth, making it a key driver for profitability across the telecom sector.

4. Which telecom players are best positioned for ARPU growth?

Telecom players with strong 4G and 5G networks, robust digital ecosystems, and a significant share of premium and enterprise users are best positioned for ARPU growth. Leading operators like Airtel and Jio are expected to benefit the most, driving higher telecom ARPU and telco revenue growth, making them attractive telecom sector stock options for investors.

5. How will 5G adoption impact ARPU trends in FY26?

5G adoption in FY26 will significantly boost ARPU by enabling premium data plans, enhanced digital services, and high-value enterprise solutions. Increased 5G usage will drive higher telecom ARPU and support sustained telco revenue growth, positioning operators to capitalise on emerging opportunities and strengthen profitability across the telecom sector.