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Kolkata: Telecom sector revenue is slated to grow 16-17% on-year in the March quarter, FY25, and end the year at Rs 2,68,800 crore — the highest since Reliance Jio launched in FY17. India’s top two private carriers Reliance Jio and Bharti Airtel — are set to report strong customer additions now that the impact of SIM consolidation after the rate hikes of July 2024 are behind, analysts said. Advt Estimated sectoral revenue growth in Q4FY25 will be sharply higher than the 8% on-year revenue growth clocked by the industry before the last July industry-wide headline rate hikes.
Strong revenue growth in the fiscal fourth quarter will also be boosted by the tail-end impact of the July 2024 rate hikes — primarily for Jio, which has a higher chunk of users on longer-span packs — and robust 2G to 4G/5G conversions by the private carriers, analysts added. “After headline price hikes last July, telecom sector revenue growth jumped to 14% on-year in Q2FY25, and further to 16% on-year in Q3FY25 from the modest 8-9% pre-tariff hike level. The industry should be able to sustain the 16-17% on-year revenue growth in Q4FY25, helped by residual flow-throughs of the last rate hike coupled with strong overall user gains as the SIM consolidation impact will have largely eased, and further helped by more prepaid users, who had ported out to BSNL , returning back to the three private carriers,” Mayuresh Joshi, director (equity research) at the Indian unit of US-based William O’ Neil & Co, told ET.
Advt Global brokerage CLSA estimates the telecom sector to report 12.3% on-year revenue growth in FY25 to Rs 2,68,800 crore. This will be more than 62% higher than the Rs 1,65,600 crore clocked in FY17, when Mukesh Ambani-owned Reliance Jio had launched mobile broadband services back in September 2016 with its disruptive tariffs and triggered big-ticket consolidation in India’s telecom sector.
Analysts also expect Vi to report a fall in customer losses in Q4FY25, given that its combined VLR or Rs active’ user numbers for December 2024 and January 2025 showed positive net adds in 11 circles after a very long time, a trend expected to improve as capex spends rise. In the first nine months of FY25, Vi’s capex has risen three times to over Rs 5,300 crore, and the telco is targeting Rs 10,000 crore capex in FY25. BNP Paribas expects the telecom sector to report double-digit onyear revenue growth till FY26, led by further tariff hikes and customers upgrading to bundled plans.
“Airtel has benefitted the most from the tariff hike but for Jio, we see acceleration of revenue coming from other digital services, including content, enterprise and support services,” BNP Paribas said in a research note seen by ET. According to analysts, all private operators are focusing more on getting subscribers to adopt mobile data bundled plans and move them up the value chain. This, since adoption of bundled data plans drives up average revenue per user (ARPU) as bundled plan rates are higher than blended ARPU and 1.
5x of voice ARPU. CLSA has factored in another 10% tariff hike in 2HFY26 for Airtel, Jio and Vi, which along with rising 4G/5G penetration will drive 12% telecom sector revenue, compounded annually by FY27. By Kalyan Parbat , ET Bureau Published On Feb 22, 2025 at 07:44 AM IST Telegram Facebook Copy Link Be the first one to comment.
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