Revenue milestone: Airtel is leading the way with record-high Arpu

Leading telecommunications company Bharti Airtel recently hit a landmark number on customer revenue, thereby signalling a positive outlook for the telecom sector. At the quarterly earnings, reported last week, the company announced monthly average revenue per user (Arpu) of ₹250, more than two years after reaching the ₹200 mark. While the number is still some distance away from the ₹300 Arpu goal that the company’s founder and chairman, Sunil Bharti Mittal, has often spelt out (though without a target date), it signifies a healthy break from a sluggish trend that the industry has witnessed for a long time. 

At an Arpu of ₹250, Airtel is much ahead of other telcos in India. The biggest company in this space by subscriber numbers, Reliance Jio, is at ₹209, and Vodafone Idea at ₹175. The annual industry numbers given out by the Telecom Regulatory Authority of India (Trai) put the wireless Arpu of the sector at ₹174.46 in 2024-25, with a growth rate of 16.89 per cent over the previous year. The rise in Arpu was primarily because of the tariff increases announced by telcos in 2024-25 after several quarters. Indeed, India’s telecom Arpu has been a laggard for years when compared with telcos around the world. The top telcos in the United States such as AT&T and T-Mobile have clocked over $50 (around ₹4,300) per user per month in wireless service and much higher in the case of data service, according to latest reports. The Arpu of some of the leading European telecom companies recently remained at least around 10 euros (more than ₹1,000) and those in China at around 50 yuan (around ₹600). 

As Arpu is a key yardstick of a telecom company’s financial health, telcos must work on effective monetisation strategies. This may not necessarily mean raising tariffs across the board but rather designing some services with differential pricing. Mr Mittal, who had in 2021 said that Airtel would not shy away from raising tariffs, has maintained that companies must try to reach ₹300 to remain relevant in the market. Even though that may be a good target for telcos to keep their balance sheet robust, they must not lose sight of innovation and the quality of service being offered to consumers. As competition is expected to ensure quality of service, a duopoly situation in the telecom sector may not be a good idea. With the telecom sector being high on debt, the possibility of a duopoly is frequently a talking point. Against that backdrop, higher Arpu should become a common goal for the industry by way of innovation and niche packages. Airtel, for instance, announced its entry into the local Cloud services market through its digital subsidiary Xtelify recently. It plans to offer data localisation solutions to businesses. 

There’s no doubt that only a focused and agile approach to data will enable the telecom industry to navigate complexities, including artificial intelligence-linked disruption. Instead of knocking on the government door for financial relief, companies must get future-ready. Even as monetisation and higher Arpu should be an important objective for the industry, it is important to ensure telecom services remain accessible to all. The current teledensity — of 85 per cent in India — has much room for growth, still.