India Telecom Sector "ARPU reality check: Growth momentum may moderate" Killa

Research evidence excerpt

India Telecom Sector "ARPU reality check: Growth momentum may moderate" Killa

Global Research

9 June 2026ab

India Telecom Sector Equities

IndiaARPU reality check: Growth momentum may

moderate Wireless Communications

Navin Killa

Analyst

navin.killa@ubs.com

Maintain Cautious view on sector, downgrade Indus to Sell +852-2971 7594

Amidst a difficult macro and rising inflationary pressures, we believe consensus Neil John

expectations of a mobile tariff hike in FY27 are at risk with sector revenue growth Associate Analyst

slowing to c8% YoY in Q4FY26. We cut our mobile revenue estimates for Airtel by 2-4% neil.john@ubs.com

as we now assume a c10% price increase in Q3FY27 but do not rule out risk that this +91-22-6155 6000

gets delayed into FY28. The change in revenue estimates for VIL is smaller since the Ajay Raj Choudhary

recent stabilisation in subscriber base should help the company accelerate 2G to 4G Associate Analyst

migration and provide upside to ARPUs. We also cut our EBITDA and DPS estimates for ajay-raj.choudhary@ubs.com

Indus as we see the risk that tenancies outside of Airtel and VIL don’t get renewed while +91-20-3055 5000

capex could remain elevated due to investments in Africa, tower relocations in India and Aditya Chandrasekar

investments in renewable energy initiatives. With the stock's dividend yield at 3-5% for Analyst

the next 2-3 years we struggle to see compelling value. Downgrade Indus to Sell with aditya.chandrasekar@ubs.com

new PT of Rs395. Lower Airtel PT to Rs1,800 (maintain Sell). Raise VIL PT to Rs15 on AGR +91-22-6155 6056

relief (maintain Neutral).

ARPU growth likely to slow, consensus still building aggressive price increase

After three rounds of price increases in the last 5 years, India's mobile revenue to GDP