New Delhi, December 25: The revenue of India’s telecom industry increased 8 per cent (quarter-on-quarter) to Rs 674 billion (13 per cent growth year-on-year) in the second quarter of FY25, mainly driven by tariff hikes, according to a new report. Driven by three rounds of smartphone tariff hikes, India’s quarterly telecom revenue has almost doubled (up 96 per cent) since September 2019, implying 14 per cent five-year industry revenue CAGR, according to the report by Motilal Oswal Financial Services Ltd.
Given the consolidated market structure in the Indian telecom industry, higher data consumption, lower ARPU, and inadequate returns generated by telcos, “we expect tariff hikes to be more frequent. We build in 15 per cent tariff hike in December 2025.” The telecom industry’s average revenue per unit (ARPU) has almost doubled from Rs 98 in September 2019 to Rs 193 in September 2024, driven by tariff hikes. However, as a result of sharp tariff hikes, the industry’s subscriber base at 1.15 trillion in September 2024 is lower than September 2019 levels (1.17 trillion). AI Growth in 2025: Artificial Intelligence To Generate New Revenue Streams Next Year, Innovate Business Processes, Says Experts.
Among telcos, Bharti Airtel has been the biggest beneficiary of tariff hikes with a 2.2 times increase in implied ARPU, registering a 17 per cent five-year CAGR. “We believe the significant improvement in the data subs proportion has also been a key driver for Bharti’s industry-leading ARPU,” said the report. Reliance Industries Stock Falls 23% From Highest Level in July 2024, Records Longest Losing Streak Since COVID-19 Market Slump.
Over the reporting period from 2019-2024, Bharti’s revenue has increased 2.6 times, implying 21 per cent five-year revenue CAGR, with incremental revenue market share significantly higher at 48 per cent. “With Vi’s (Vodafone Idea) large capex plans, we believe the pace of market share gains may slow down. However, RJio and Bharti are still likely to continue gaining market share at Vi’s expense, in our view,” the report noted. —IANS na/
(The above story first appeared on LatestLY on Dec 25, 2024 12:56 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).