NEW DELHI, Aug 18: India’s telecom sector is set for strong financial performance as the operating profit (Ebidtar) is expected to climb 12-14 per cent and reach about Rs 1.55 lakh crore in FY26 as per Crisil Ratings.
Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (or restructuring), or EBIDTAR is a financial metric used to assess a company’s operating performance.
The expected optimistic performance of the Indian telecom sector is driven by surging data consumption and an increase in average revenue per user (ARPU). Moreover, great operating performance, declining capital expenditure (CAPEX) after 5G rollout, also fueled Telcos.
Anand Kulkarni, Director, CRISIL Ratings, said, “ARPU is expected to climb to Rs 220-225 this fiscal from Rs 205 last fiscal, largely on account of rising data consumption. Wider availability of the 5G network, with penetration expected to touch 45-47% by March 2026 from 35% as of March 2025, is fueling data consumption for applications such as social media, video streaming, gaming, generative artificial intelligence, and digital marketing.”
“Additionally, the Indian telcos have been rebalancing their offerings by reducing plans with low data limits or offering 5G services only on plans offering higher data limits. This trend is expected to move consumers to premium plans, boosting telcos’ ARPU.” Kulkarni added.
The CRISIL report also noted that the internet penetration in rural and semi-urban areas is expected to increase by 4-5% rising to 82% by fiscal 2026. Moreover, the users transiting from voice only plans to data plans will further lift the ARPU.
Nitin Bansal, Associate Director, CRISIL Ratings, said, “Capex intensity, which averaged 31% over the past two fiscals, is expected to moderate to 24-26% this fiscal as a large part of 5G network rollout has been completed by leading telcos. Furthermore, most of the spectrum purchase was completed in fiscal 2023, and the next significant spectrum renewal will be due in 2030.” (UNI)
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