Telco ARPU Set for Modest Q3 Rise; Jio, Airtel Lead Growth Amidst VIL Decline

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AuthorVihaan Mehta|Published at:
Telco ARPU Set for Modest Q3 Rise; Jio, Airtel Lead Growth Amidst VIL Decline
Overview

JM Financial forecasts a 0.4-1% Q-o-Q ARPU growth for Indian telecom operators in Q3FY26, driven by customer upgrades. Reliance Jio and Bharti Airtel are expected to lead subscriber additions, while Vodafone Idea faces continued user losses. Brokerages maintain positive outlooks on major telcos, projecting industry-wide ARPU and Ebitda growth through FY28.

Telecom Sector Outlook

Indian telecom operators are poised for modest sequential growth in average revenue per user (ARPU) for the December 2025 quarter (Q3FY26), with JM Financial projecting a 0.4-1% increase. This uptick is anticipated due to ongoing customer migration to higher-value plans. Subscriber additions are expected to remain robust for market leaders Reliance Jio and Bharti Airtel.

Key Player Performance

Reliance Jio is projected to add approximately 8.4 million subscribers, driving a 2.1% Q-o-Q revenue increase and a 2.6% rise in Ebitda. Its ARPU is expected to inch up by 0.4% to around ₹212. Bharti Airtel anticipates around 3.3 million new subscribers, boosting India wireless revenue by 1.7% and Ebitda by 2.1%, with ARPU climbing 1% to ₹259. Bharti Hexacom is also set for growth, with Ebitda up 1.8% and ARPU at ₹253.

Brokerage Stance

JM Financial maintains a 'Buy' rating on Bharti Airtel, Bharti Hexacom, and Tata Communications, setting target prices of ₹2,460, ₹2,195, and ₹2,250, respectively. The firm reiterates a positive view on Reliance Jio. Conversely, Vodafone Idea is expected to continue losing subscribers, despite a 1.1% ARPU increase, its revenue and Ebitda are forecast to remain flat. JM Financial retained an 'Add' rating on Vodafone Idea with a ₹12.5 target price.

Indus Towers is expected to see adjusted Ebitda grow 1.4% Q-o-Q, benefiting from network expansion by both Vodafone Idea and Bharti Airtel. However, its revenue is forecast to be flat at ₹81.7 billion due to a reconciliation income in the previous quarter. JM Financial reiterated a 'Reduce' rating on Indus Towers, raising its target price to ₹400, citing duopoly risks.

Tata Communications is anticipated to post 1.6% revenue growth and 1.8% Ebitda rise, driven by its digital offerings, though core connectivity may face challenges from client dues and cable cuts.

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