In the fourth quarter of FY25, the three leading telecom companies in India, Bharti Airtel, Vodafone Idea, and Reliance Jio, reported low ARPUs of Rs 245, Rs 164, and Rs 206.2, respectively.
To maintain the viability of the sector, all three operators underlined how urgently India’s mobile tariff structure needs to be revised.
India’s Top Telecom Players Report Low ARPUs in Q4 FY25, Urge Tariff Reform
Low tariffs are frequently cited by the government as a strength, but telecom companies contend that because of the significant investments required for infrastructure and 5G, they pose a threat to their financial stability.
“Indian mobile tariffs continue to remain among the lowest globally and require further repair,” said Gopal Vittal, MD of Bharti Airtel.
Vittal identified the following factors as key drivers of Airtel’s ARPU growth: international roaming, prepaid to postpaid migration, feature phone to smartphone upgrades, and data monetization.
He called for a stratified pricing model based on user consumption levels, criticizing the current “one-size-fits-all” pricing model as “broken.”
Vittal suggested a small-medium-large-XL plan structure, lowering data allotments in mid-tier plans and encouraging users to upgrade.
To demonstrate the need for reform, he contrasted Indonesia’s tariff gap (100 to 500) with India’s (100 to 250).
Soumen Ray, the CFO of Airtel, commended “tariff repair” for improving Bharti Hexacom’s performance and raising dividends.
High 5G adoption and an ARPU of Rs 206.2 were among Reliance Jio’s impressive results, which were fueled by both tariff changes and increased data usage.
According to Jio CFO V. Srikanth, the company’s dominance in the data and technology markets validates their faith in the current approach.
Anshuman Thakur of Jio pointed out that “flow-through of the tariff increase” and “more data consumption” were the main causes of ARPU growth.
Generally speaking, Jio minimizes ARPU as a performance metric in favor of more significant metrics like data consumption and capacity market share.
VI CEO Moondra Stresses Need for Further Tariff Hikes to Sustain Innovation and Investments
Akshaya Moondra, CEO of Vodafone Idea, emphasized that additional tariff increases are necessary for the industry to sustain innovation and investment capacity.
Moondra pointed out that returns on capital are undermined because ARPUs are still among the lowest in the world, even with a 2024 price increase.
He underlined that since the current incremental usage pricing is “extremely low” and unsustainable, heavier data users should make larger financial contributions.
Moondra explained that the decision to raise tariffs is made by the industry and is not dependent on government approval.
He advocated for a differentiated pricing strategy that is “telescopic” in nature, meaning that higher usage translates into proportionately higher payments.
