ICRA projects that India’s telecom industry will maintain strong financial momentum in the coming years, with operating income expected to grow by 10–12% in FY2026, reaching ₹3.5-3.7 lakh crore. This follows the 12–14% revenue growth estimated for FY2025, which lifted industry income to ₹3.2-3.3 lakh crore, driven primarily by tariff hikes and improving ARPU levels.
According to ICRA, tariff revisions implemented in July 2024 significantly strengthened operator cash flows by pushing ARPU above ₹200, up from ₹184 in FY2024. These price hikes are estimated to add nearly ₹20,000 crore to sector OPBDITA once fully absorbed, helping the industry achieve an operating profit of ₹1.6-1.7 lakh crore in FY2025.
For FY2026, ICRA anticipates another tariff hike cycle, which could increase ARPU to around ₹220, further supporting revenue expansion and ensuring a stable earnings growth trajectory for telecom operators. This ARPU-led growth is expected to be a key pillar of financial improvement across the sector.
On the debt front, ICRA estimates that total telecom industry debt will peak at approximately ₹6.6 lakh crore by March 31, 2025. This elevated debt burden is attributed to front-loaded 5G investments, spectrum payments, and AGR-related liabilities. The agency notes that capex intensity has likely peaked in FY2024-FY2025 and is set to decline in subsequent years.
Despite high leverage, industry fundamentals are expected to improve. Key financial metrics such as debt/OPBDITA are projected to remain stable at 3.9-4.0x, while interest coverage is expected to stay around 3.3x in FY2025. From FY2026 onward, both metrics have room to strengthen as capex requirements reduce and incremental ARPU gains from tariff hikes flow into operator balance sheets.
