India’s Leading Telecom Firms Report Low ARPUs in Q4 FY25, Call for Tariff Hike
In the fourth quarter of FY25, India’s top telecom operators—Bharti Airtel, Vodafone Idea, and Reliance Jio—posted average revenue per user (ARPU) figures of Rs 245, Rs 164, and Rs 206.2, respectively, highlighting the sector’s ongoing financial strain.
All three companies emphasized the urgent need to restructure mobile tariffs in India to ensure the industry’s sustainability.
While the government often highlights India’s low mobile rates as a competitive advantage, telecom firms argue that the current pricing model is unsustainable, especially given the high capital requirements for expanding infrastructure and rolling out 5G services.
“India’s mobile tariffs are still among the lowest in the world and need substantial correction,” said Bharti Airtel MD Gopal Vittal.
Vittal pointed to several key factors driving ARPU growth for Airtel, including increased international roaming, a shift from prepaid to postpaid plans, user upgrades from feature phones to smartphones, and enhanced data monetization.
He criticized the current uniform pricing system, calling it “broken,” and advocated for a tiered pricing structure based on user consumption. He proposed introducing small, medium, large, and XL plans, with reduced data allocations in the mid-tier options to encourage plan upgrades.
To illustrate the need for pricing reform, Vittal compared India’s narrow tariff range (Rs 100 to Rs 250) with Indonesia’s broader range (Rs 100 to Rs 500).
Meanwhile, Airtel CFO Soumen Ray praised recent tariff adjustments, crediting them for improved performance at Bharti Hexacom and higher dividend payouts.
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.
