India's Telecom Surge: A New Era of Growth and Data Consumption

India's telecom sector is poised for a robust multi-year growth phase with a projected ARPU growth of 7% between FY26-29. Driven by increased data consumption and widespread mobile adoption, the sector will see stronger cash flows and an enhanced financial position, according to Elara Capital's report.

India's telecommunications industry is on the brink of significant growth, entering a recovery phase expected to last several years. As per Elara Capital's report, the average revenue per user (ARPU) for this sector is projected to grow at a compound annual growth rate (CAGR) of 7% during fiscal years 2026 through 2029. This growth is anticipated to narrow the nation's current tariff gap compared to global standards.

The consolidation within the telecom industry is largely complete, with India continuing to offer some of the world's most affordable tariffs. This strategic positioning sets the stage for companies within the sector to achieve stronger cash flows, expedited deleveraging, and improved earnings. A noted increase in data consumption, fueled by affordable pricing and increasing smartphone usage, supports this trend.

With India's monthly data consumption per user forecasted to surge, Elara Capital predicts it will surpass 65GB per user by the end of the next decade. This increase will be supported by a rise in digital engagement and demand for data-heavy applications, including video streaming, cloud gaming, and IoT solutions. The anticipated upward trajectory in ARPU is expected to be sustained by strategic tariff hikes and enhanced service offerings, reinforcing the sector's potential for revitalized growth and profitability.