FPJ News Service mumbai

Crisil Ratings on Monday said the operating profit (Ebitdar) of India’s telecom companies (telcos) will grow a strong 12-14% to Rs 1.55 lakh crore this fiscal, driven by surging data consumption and a consequent increase in the average revenue per user (ARPU).

The robust operating performance, along with declining capital expenditure (capex) intensity of leading players after completion of 5G rollout, will improve their free cash flow. This will support credit profiles of leading players in the industry.

“Our analysis of three telcos, with 93% of subscriber market share, indicates as much. Last fiscal, Ebitdar growth at 17% was predominantly lifted due to tariff hikes. This fiscal, growth will be supported by strong intrinsic factors,” Crisil Ratings, said.

“ARPU is expected to climb to Rs 220-225 this fiscal from Rs 205 last fiscal, largely on account of rising data consumption. Wider availability of 5G network, with penetration expected to touch 45–47% by March 2026 (35% as of March 2025) is fuelling data consumption for applications such as social media, video streaming, gaming, generative artificial intelligence and digital marketing,” Anand Kulkarni, director, Crisil Ratings, said.

Consequently, data usage is expected to increase to 31-32 GB in current fiscal from 27 GB last fiscal. Additionally, the Indian telcos have been rebalancing their offerings by reducing plans with low data limit or offering 5G services only on plans offering higher data limit. This trend is expected to move consumers to premium plans, boosting telco ARPU.