India's Telecom Boom: Entering the Peak Decade

India's Telecom Boom: Entering the Peak Decade, Bullish on India's Telecom? Here’s Why the Growth Story is Just Beginning

India's telecom sector is entering a peak growth decade, fueled by 5G expansion, rising ARPU, and massive subscriber adoption, with projections for the industry to contribute up to 20% of GDP by 2035.​

Market Growth Drivers

The sector's revenue grew 10-12% in FY2025 to ₹3.5-3.7 lakh crore, driven by tariff hikes pushing ARPU above ₹200, expected to reach ₹220 soon. Wireless data usage surged, with broadband connections expanding 16-fold to 944 million in the last decade, alongside internet users hitting 974 million. The market is forecasted to reach $153.83 billion in 2025, growing at 3.94% CAGR to $186.61 billion by 2030.​

5G Rollout Momentum

India achieved 365 million 5G subscribers by June 2025, with operators deploying 4.69 lakh base stations across 99.6% of districts. Reliance Jio and Bharti Airtel lead, with Jio at 191 million 5G users and Airtel expanding rapidly; Vodafone Idea joined recently while BSNL prepares launch. This infrastructure supports next-phase growth in digital services and rural connectivity, where tele-density hit 59.43%.​

Key Players' Performance

Bharti Airtel reported Q2FY26 net profit up 73% YoY to ₹6,792 crore on ₹52,145 crore revenue, with India revenue rising 22.6%. Jio's Q2FY26 profit grew 13% YoY to contribute to strong topline of ₹31,857 crore, backed by subscriber gains to 488 million. Vodafone Idea faces survival risks from ₹2.1 lakh crore AGR dues and debt, despite government equity stake.​

Investments and Challenges

Telcos invested over ₹5.5 lakh crore in spectrum via eight auctions pre-2024, with recent muted bids at ₹11,341 crore focused on renewals. Industry debt stands at ₹6.4 lakh crore, eased by tapering capex post-5G rollout. Competition from satellite comms and regulatory hurdles persist, but tariff hikes and 5G monetization signal sustained bullishness.

Bharti Airtel and Reliance Jio are best positioned to benefit from upcoming tariff hikes of 10-15% expected between December 2025 and June 2026, due to their strong market shares, higher ARPUs, and robust financial health.​

Airtel's Advantages

Airtel leads with an ARPU of ₹256 in Q2FY26, up 2.2% quarter-on-quarter, driving 12% YoY revenue growth to ₹52,145 crore and 73% profit surge. Its premiumization strategy, including phasing out low-data plans, positions it to capture most hike benefits amid stable subscriber additions and 5G leadership. Analysts like Jefferies rate it a top pick with earnings visibility from tariff-led ARPU CAGR of 11% through FY2028.​​

Jio's Strengths

Jio's ARPU rose 1.2% to ₹211.4 in Q2FY26, supporting 10% YoY revenue growth and subscriber base exceeding 488 million, with potential pre-IPO hike leadership. Its focus on upgrades to higher-value packs (e.g., 1.5GB/day baseline) and data monetization ensures sustained gains from hikes without volume erosion. Strong broadband leadership and homegrown tech stack further bolster resilience.​

Vodafone Idea's Limitations

Vi trails with ARPU at ₹180 (up 8.7% YoY) and just 4% revenue growth, hampered by ₹2.1 lakh crore AGR dues, high debt, and market share erosion. While it may follow hikes, survival risks and delayed 5G rollout limit upside compared to peers.​

Tower and Regional Plays

Bharti Hexacom (Rajasthan/Northeast focus) and Indus Towers stand to gain indirectly from increased data demand post-hikes, with Jefferies targets implying 29% and 6% upside, respectively. These benefit from Airtel/Jio capex moderation and steady tenancy growth.​