NewKerala.com

Key Points

Indian telecom ARPU is set to rise 10-12% this fiscal, driven by surging rural data consumption. Internet penetration in rural areas jumped from 59% to 78% over four years, outpacing urban growth. Operators are expanding 4G networks to capitalize on this trend, with rural users contributing over half of ARPU gains. Despite tariff hikes, rural demand remains resilient as mobile internet becomes essential for daily needs.

Key Points: Rural Data Boom to Push Telecom ARPU Up 10-12% This Fiscal

  • Rural internet penetration surged from 59% to 78% in 4 years
  • Telecom tariffs rose 12-15% CAGR since 2019
  • 55-60% of ARPU growth to come from rural users
  • 4G expansion to sustain data demand
2 min read

Telecom ARPU to rise 10-12% this fiscal as rural data usage surges

Crisil forecasts telecom ARPU growth as rural India drives data consumption, with 4G expansion and tariff hikes fueling revenue gains.

"The industry ARPU is expected to rise by Rs 20-25 to reach Rs 225-230 by the end of this fiscal – Anand Kulkarni, Crisil Ratings"

New Delhi, May 13

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.

- ANI

Share this article:

Reader Comments

Here are 6 diverse user comments reflecting Indian perspectives on the telecom ARPU growth story:
R
Rajesh K.
Finally rural India is getting the digital attention it deserves! But telcos must ensure quality connectivity - my village still has patchy 4G. Speed matters as much as coverage. Hope these ARPU gains are reinvested in infrastructure.
P
Priya M.
As someone who moved from Mumbai to rural Maharashtra, I can confirm the data revolution is real! My relatives video call daily, use UPI for kirana shops, and even watch Hotstar. But telcos shouldn't use this as excuse for frequent tariff hikes. ₹230 ARPU is already steep for farmers.
A
Amit S.
Good analysis but misses one key point - when will 5G reach villages? Cities enjoy 200Mbps while rural areas struggle with 10Mbps on 4G. Digital India should mean equal opportunities. 🚜📱
S
Sunita R.
Telecom companies are making record profits while service quality hasn't improved proportionately. My father in Bihar still faces call drops despite paying more. TRAI should mandate better QoS standards before allowing further ARPU increases.
V
Vikram J.
This rural data boom is creating new opportunities! I run a digital literacy center in UP and see villagers using YouTube to learn farming techniques, WhatsApp for mandi prices. But data packs need to be more affordable - maybe introduce agriculture-specific plans?
N
Neha P.
Interesting trend but worried about digital divide. Urban users get unlimited plans while rural users pay per GB. Also, women's mobile ownership is still low in villages - telcos should address this gap to truly democratize data access. 👍

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50