Axis Capital believes that the industry will not need to take large tariff hikes in the future to achieve its long-term ARPU growth goals. A more moderate 8-10% increase will be enough to drive growth.
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The gap between tariff hikes, which currently stands at about 2.5 years, is expected to shorten going forward. While there may be a tariff hike in 2025-26 (FY26), the timing remains uncertain.
Malhotra also pointed out that the ARPU growth is not solely reliant on tariff hikes but can be supported by factors such as improved services, better user engagement, and enhanced value offerings.
Axis Capital expects Jio to continue leading the market in subscriber additions. Jio’s strategy of offering low tariffs, particularly with its entry-level Jio Bharat phone, gives it a competitive edge.
The recent reintroduction of prepaid recharge options focussing on voice or SMS services by the Telecom Regulatory Authority of India (TRAI) will also benefit the industry. This Special Tariff Voucher (STV) initiative offers greater flexibility to customers, allowing them to pay only for the services they need.
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For the entire interview, watch the accompanying video
