Growth slows for telcos as subscribers plateau, prices stay low

Mumbai: India's telecom companies are struggling to grow revenues as subscriber numbers have peaked, data prices are already low, and the average revenue per user has moved only marginally, analysts said. Serving India's 60 million small businesses digitally could be the industry's next big opportunity might be the next opportunity, they said.

Wireless Average Revenue Per User (ARPU) has stayed between Rs 180-200 despite tariff hikes and 5G investments, data from the Telecom Regulatory Authority of India showed. With the lowest mobile data prices globally at about Rs 9 per GB and average monthly mobile data consumption exceeding 36 GB per user.

India’s active subscriber base has crossed 1.17 billion, which leaves little room for new additions. This has limited revenue growth for telcos.



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Axis Capital estimates sequential revenue growth across the sector at just 0–1% currently in its Q4 FY26 telecom outlook report.

"The affordable, faster, more data playbook is nearly exhausted from an Indian market perspective," said Aditya Khaitan, TMT Partner at a recent Deloitte company webinar.

Analysts now see MSMEs as the next big revenue stream for telcos. Deloitte said digital commerce and local advertising for small businesses was a way forward for Indian companies now.

"If telcos onboard even one-sixth of them and each shop does three orders a day worth ₹1,000, a 3% commission alone can generate Rs 33,000 crore every year," Khaitan said. Local advertising could take the total opportunity to Rs 50,000 crore annually, he added.


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MSMEs already make up nearly 24% of India's Rs 1.5 lakh crore advertising market, said Shilpa Malaiya Singhai, MD of business transformation services at Alvarez & Marsal India.

"Telcos, which bring to the table strengths such as extensive distribution reach, access to first-party customer data, robust connectivity infrastructure, and entrenched billing relationships, are well positioned to address this opportunity," she said.

Though analysts see this as a promising way to boost revenue, they warn of constraints. Harsh Walia, TMT Partner at Khaitan & Co., said reaching Rs 50,000 crore would require more than just transaction commissions. Telcos would need MSMEs to pay for a range of digital services, including cloud tools, payments, and marketing solutions.

"Flat ARPU has emerged as a structural constraint rather than a cyclical fluctuation. The projection that telecom operators could generate around Rs 50,000 crore annually from engagement with India's MSME base is directionally credible, but the pace of realisation depends on various factors," he said.

Another hurdle in building a business around MSMEs is that half of them have investments below Rs 5 lakh, and over 55% still do not have reliable internet access, Singhai noted. Until these hurdles are cleared, scaling this opportunity will not be straightforward, analysts said.