Telecom ARPU to rise 10-12% this fiscal as rural data usage surges
New Delhi : The average revenue per user (ARPU) for Indian telecom operators is expected to rise 10-12 per cent in the current financial year 2025-26 as rural data consumption surges, according to Crisil Ratings.
Increasing internet adoption and data consumption by rural subscribers are emerging as structural drivers of growth in Indian telecom companies' average revenue per user (ARPU).
To capitalise on the trend, Crisil noted that telecom operators are strengthening rural connectivity, which should help expand their data subscriber base and returns.
Since December 2019, telecom tariffs have reportedly climbed at a 12-15 per cent CAGR through successive raises in 2019, 2021, and 2024. The latest telecom tariff hike was taken in July 2024.
Over the four calendar years ended December 31, 2024, internet penetration in rural India surged from 59 per cent to 78 per cent, outpacing urban areas, which grew from 77 per cent to 90 per cent.
Internet penetration in rural areas is expected to further increase by 4-5 per cent by the end of 2025-26, supported by continued adoption of online communication, digital payments as well as increasing usage of social media, content streaming services and e-commerce.
Despite being more price sensitive, the rural internet user base stayed resilient over the past year, even in the face of tariff hikes introduced in mid-2024, reflecting the high dependence of rural users on mobile internet, Crisil said.
This data consumption growth trend will be sustained with the expansion of the 4G networks in the underpenetrated areas. According to the rating agency, it will drive up the ARPU going forward.
Anand Kulkarni, Director, Crisil Ratings, said, "The industry ARPU is expected to rise by Rs 20-25 to reach Rs 225-230 by the end of this fiscal, assuming tariffs remain stable."
According to the rating agency, around 55-60 per cent of the incremental ARPU is expected to come from rural subscribers.
"Relatively lower internet penetration in rural regions will drive migration of subscribers to data plans. Additionally, uptrading of plans due to higher data consumption will also drive ARPU growth. Here as well, rural areas will play a key role as mobile phones serve as the primary gateway vis-a-vis metro users, who have alternatives such as wi-fi," Anand Kulkarni.
However, Crisil Ratings argued that the affordability of data plans will remain essential for the growth in rural data subscribers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times of Oman
10 hours ago
- Times of Oman
Trade war with the US starts taking its toll on China
New Delhi: The trade war with the U.S. has started taking its toll on China. Exports to the lucrative American market have shrunk. At Chinese export hubs in south-eastern China, factories are lying closed and workers have been laid off. Stocks of finished products are accumulating in warehouses. China signed an agreement with the U.S. on May 12 for a temporary reduction in tariff but this did not have the desired effect. Factory activities in China continued to contract in May, with the Purchasing Managers Index at the end of May being 49.5. A PMI value less than 50 indicates contraction in business activities compared to the previous month. Because of a contraction in export, business houses in major export hubs in places like Zhejiang, Guangdong, and Jiangsu are announcing factory holidays; suspending production and reducing work hours and wages of employees. To clear the stockpile of goods at a discount, they are trying the social commerce platforms. Products ranging from yoga pants and footwear to home appliances and blankets which used to sell in the U.S. at fancy prices are now being sold online by Chinese exporting houses at bargain prices. A survey carried out by Radio Free Asia last April at a warehouse at Jiaxing in the Zhejiang province, where export items constitute the main business activity, has revealed heaps of merchandise originally meant to be exported now lying abandoned. Products selling at $100 in the U.S. do not sell in China even at a deeply discounted price of only a few dollars. Rubber clogs of U.S. footwear brand Crocs manufactured in China can sell in the American market for as high as $70 a pair but in the Chinese markets it is difficult to sell them even for a few pennies. The comparative advantage of China lies in its large manufacturing base and thoroughly integrated supply chains; particularly in hi-tech and green industries such as electrical vehicles and their batteries and solar energy. These sectors are heavily dependent on open markets and steady demands. Now the prohibitive tariff imposed by the Donald Trump government in the U.S. coming in the wake of earlier tariff restrictions imposed by the U.S., Europe and Canada on the import of Chinese electrical vehicles has caused demand to drop significantly for Chinese goods. Experts argue that China remains highly reliant on the U.S. as its top export market, to which it had exported goods worth nearly $450 billion in 2024. The crisis in the export market has hit even items that are produced only for the domestic market in China because of the overall economic downswing. The crippling tariff rate imposed by the U.S. has stood in the way of the recovery of the already sagging consumer sentiments in China since the pandemic. Like, the Chinese knife brand Zhang Xiaoquan is sold mostly in the domestic market; with exports accounting for less than one percent of the annual sales. But even that knife is selling at a few cents per knife. One factory is pushing its employees to sell overstocked blankets online. A factory manager had lately managed to sell 60 blankets to his own relatives and friends. Workers in the factory at Suzhou city in Jiangsu were told that their working hours would be reduced and they would be paid only their basic wages. An angry Beijing has threatened countermeasures against countries which are signing trade deals with the U.S. at the expense of China to get tariff exemptions from Washington. This threat has followed recent reports that President Donald Trump is seeking to use the tariff talks to push partners of the U.S. in trade to curb imports from China. In return, these countries could secure reductions in additional tariffs imposed by the U.S. The Trump administration has said it is in negotiations with more than 50 countries; among them Israel, Japan, the U.K., Vietnam, Cambodia, Thailand, South Korea, India, Australia, Argentina, Canada, Mexico, Switzerland, Malaysia, Indonesia and the European Union countries. Beijing has threatened to target all these countries in turn. Following the May 12 agreement with China, Washington had lowered its 145 percent tariff on Chinese goods to 30 percent for 90 days to allow for more negotiations. Donald Trump had all along been accusing China of exploiting the U.S. in external trade, and arguing that his tariffs were necessary to revive domestic manufacturing in the U.S. and return jobs to American workers. China, too, had reduced its taxes on imports from the U.S. to 10 percent from the earlier 125 percent. But this agreement is now in the process of coming unstuck. On May 30, the U.S. President accused China of violating a bilateral deal to roll back tariffs and announced a general increase in the tariff on the import of steel and aluminium to 50 percent. Although China does not export much steel to the United States since the imposition of a 25 percent tariff in 2018 to shut out Chinese steel, it ranks third among aluminium suppliers to the U.S. Washington has indicated that Beijing has been slow on its promise to issue export licences for rare earth minerals. Last December, China announced a ban on exports to the U.S. of critical minerals, including gallium, germanium and antimony. Beijing announced more export controls on rare earth minerals last April after Donald Trump had announced the U.S. tariffs. The May 12 agreement in Geneva called for China to lift measures to restrict its export of critical metals needed for U.S. semiconductor, electronics and defence production. US Treasury Secretary Scott Bessent has said in a recent interview that talks with China had stalled. US Trade Representative Jamieson Greer has said China has not removed non-tariff barriers as agreed. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing.' The trade war with the U.S. has thus started taking its toll on China and there is little possibility that pressure on the Chinese economy will end soon.
Times of Oman
10 hours ago
- Times of Oman
Elon Musk's Starlink gets license to offer satellite internet services in India
New Delhi: Elon Musk-owned satellite internet company Starlink has been given license by the government to launch GMPCS (Global Mobile Personal Communication by Satellite) services, VSAT Services and ISP Category-A under unified license. Starlink is the third company to receive the nod for GMPCS sevices from the Department of Telecom, after OneWeb and Reliance Jio. Global Mobile Personal Communication by Satellite (GMPCS) license authorizes the use of satellite technology for global mobile communication, providing connectivity seamlessly in the entire area of operation, particularly in remote and underserved areas. According to the Department of Telecommunications, GMPCS enables mobile communication services via satellite for users, especially in those regions where terrestrial networks' connectivity is limited. License holders deploy satellite terminals and ensure secure, continuous service with compliance with global standards. According to DoT, the license mandates adherence to privacy, lawful interception, and satellite transmission standards. Union Minister for Communications Jyotiraditya Scindia told reporters on Thursday that once licenses are given, the spectrum will be allocated to them. Scindia said that internet penetration can only be increased through satellite communication services, especially in remote areas where laying wires and installing towers would be difficult. Recently, Airtel and Jio have also partnered with Starlink to bring the latter's high-speed satellite internet services to their customers in India. Starlink will use Airtel and Jio's strong dealership network to sell and promote its services. In mid-April, Commerce Minister Piyush Goyal met a delegation from Starlink.
Times of Oman
13 hours ago
- Times of Oman
India: Runway upgrade at Delhi airport to disrupt 100 flights; 57 cancelled, 43 rescheduled
New Delhi: Delhi International Airport Limited (DIAL) CEO Videh Kumar Jaipuriar on Friday announced that Delhi Airport will temporarily shut Runway 10/28 for a three-month period to carry out critical upgrades aimed at improving fog-time operations. This will impact around 100 flights in all. Speaking to ANI, CEO of Delhi International Airport Limited (DIAL), Videh Kumar Jaipuriar, said, "Out of the four runways that the Delhi airport has, there is one runway 10/28 that we are planning to shut down for three months because there are upgrades that are required." As part of the degradation, DIAL will update the current ILS (Instrument Landing System), which is already out of order. DIAL will also make the runway CAT III-B compliant. CAT III-B is an advanced landing system that allows aircraft to land in extremely low visibility conditions. Due to the degradation activity undertaken by the DIAL, 100 flights are going to be affected overall, out of which over 43 flights are going to be rescheduled. "The new schedule has already been published, and 57 departure flights are going to be cancelled. If you put it in the perspective of the percentage, then overall, for Delhi airport, about 7 per cent of the Delhi airport capacity flights will be cancelled," said the DIAL CEO. "We also ensure that the cancellations are not something that is impacting in a big way. So, in most of the sectors where we had multiple connectivity, their 8-9 per cent of the connectivity was reduced so that overall that sector does not get impacted badly," he added. Global credit rating firm Fitch Ratings in April the current year upgraded Delhi International Airport Limited to BB+, kipping the outlook as stable. In its commentary, the rating firm said that the improvement in the financial profile is likely to be materially higher than its previous expectations. DIAL benefits from a stable regulatory regime with revenue and capex determined by the Airports Economic Regulatory Authority of India (AERA). The company also benefits from its position as India's largest airport by passenger traffic and the gateway to the national capital region with a catchment population of over 30 million, supporting strong long-term growth prospects despite some competition from the proposed opening of Noida International Airport in the financial year 2026.
