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Jio Set to Surpass Airtel in ARPU Growth!
business update, Equities, Market News - July 7, 2025

Jio Set to Surpass Airtel in ARPU Growth!

Jio Set to Surpass Airtel in ARPU Growth!

Reliance Jio’s average revenue per user (ARPU) is projected to rise by 1.8% to ₹210 in the June quarter, outpacing Bharti Airtel’s growth of 1.6% to ₹249 as competition intensifies.

Summary:
Jio is expected to outpace Airtel in ARPU growth for Q1 FY26, with an anticipated 1.8% quarter-over-quarter increase to ₹210, while Airtel is projected to see a 1.6% rise to ₹249. This signals Jio’s competitive advantage in driving incremental revenue amid a maturing telecom market, bolstered by strong 5G adoption and robust subscriber additions.

India’s telecom sector is bracing for another wave of fierce competition, with recent projections from JM Financial suggesting that Reliance Jio may surpass Bharti Airtel in average revenue per user (ARPU) growth in the first quarter of FY26. The research firm anticipates that Jio’s ARPU will increase by 1.8% quarter-on-quarter to reach ₹210 in the quarter ending in June, while Airtel’s ARPU is expected to grow by 1.6% to ₹249.
These figures, although seemingly marginal, are of considerable importance in India’s hyper-competitive telecom industry, where ARPU is a key profitability metric and a proxy for consumer stickiness, pricing power, and overall service monetisation.

Jio’s Strategic Advantage
Jio’s ARPU growth highlights its aggressive expansion strategy. As India’s largest telecom operator by subscriber base, Jio has focused on delivering affordable, high-speed data to a massive user population, while also gradually migrating subscribers to premium data packs and 5G plans.
Over the past year, Jio has expanded its 5G services in major Indian cities and semi-urban areas, encouraging user upgrades to higher data plans. The integration of JioFiber, JioAirFiber, and its content platforms like JioCinema and JioTV has created strong cross-selling opportunities, boosting average revenue per user (ARPU). Analysts attribute Jio’s ARPU growth to its balanced pricing strategy, which appeals to both budget-conscious consumers and those seeking premium upgrades as they adopt 5G devices.

Airtel Remains Strong but Faces a Tougher Climb
Bharti Airtel, which is Jio’s nearest competitor, is anticipated to report an ARPU of ₹249 in Q1 FY26, indicating a sequential increase of 1.6%. Although Airtel’s ARPU remains higher than Jio’s in absolute figures, its growth trajectory is expected to slow down a bit.
Airtel has long benefited from a relatively premium user base, with higher postpaid penetration and strong traction in enterprise services, leading to a structurally higher ARPU compared to Jio. However, incremental growth may be more challenging for Airtel because its customers already pay comparatively higher tariffs, limiting headroom for sharp pricing increases.
Airtel’s strategy prioritises premium subscribers and quality service through network upgrades and a better customer experience. While this has fostered loyalty among higher-paying customers, it has slowed ARPU growth compared to Jio, which focuses on upselling entry-level and mid-tier users.

Industry in Transition
The ARPU growth story comes at a time when India’s telecom market is undergoing a transition from 4G to 5G, a move seen as critical to sustaining revenue growth in a maturing market where subscriber growth has plateaued.
For operators like Jio and Airtel, growth in Average Revenue Per User (ARPU) is crucial to support their large investments in 5G and infrastructure. After significant spending in auctions and deployment, increasing ARPU is the next logical move. Analysts suggest that future ARPU growth will rely on tariff hikes, adoption of premium plans, and the development of 5G use cases such as gaming, IoT, and cloud services.

Regulatory Watch
The Telecom Regulatory Authority of India (TRAI) monitors tariff structures and service quality closely. While modest price increases are acceptable, excessive hikes may face regulatory scrutiny. Jio and Airtel balance affordable pricing with growth, but continued regulation is expected to keep ARPU increases fair for consumers.

Investor Perspective
From an investor standpoint, the projected ARPU trajectories reflect confidence in the sector’s resilience and growth amid high capital expenditure cycles. Jio’s anticipated 1.8% ARPU gain is being read positively, as it suggests more substantial revenue per user momentum on the back of widespread 5G adoption and subscriber upgrades.
Airtel, despite its high ARPU, faces concerns from investors about balancing growth and customer retention among price-sensitive users. As the ARPU gap between Jio and Airtel shrinks, analysts believe Jio might enhance its market leadership through pricing strategies and a robust service ecosystem.

What to Watch Ahead
The June quarter numbers, when officially reported, will offer deeper insights into how each operator is managing its user monetisation strategies in a cooling subscriber acquisition environment. Further, market watchers will closely examine how 5G adoption translates into new revenue streams beyond simply faster data, such as connected home services, AR/VR entertainment, and industrial IoT applications.
If Jio maintains its current ARPU momentum, it could strengthen its position as India’s telecom leader, using its diverse platform to boost per-user revenue. Meanwhile, Airtel must innovate premium offerings and enterprise partnerships to maintain its higher ARPU while achieving incremental growth. In a capital-intensive industry with thin margins, these ARPU changes can significantly impact cash flows and valuations. As the Indian telecom sector prepares for future growth, ARPU will be a key metric for analysts, investors, and regulators.

Conclusion
The competition for ARPU dominance in India’s telecom sector is still ongoing. As Jio positions itself to outpace Airtel in quarterly ARPU growth, the stage is set for a fierce race to monetise 5G investments while sustaining subscriber trust and competitive pricing. With consumer data consumption at record highs and next-generation services around the corner, the ARPU trends of FY26 could define who emerges strongest in India’s telecom story.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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The image added is for representation purposes only

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Analysts Discontinue to Trust Jio's valuation amid rising costs and slower revenue growth

Analysts Discontinue to Trust Jio’s valuation amid rising costs and slower revenue growth

 

An outline of Reliance Jio’s valuation reduction

Investors and experts have taken notice of Reliance Jio’s downward revision in valuation, which saw analysts lower the company’s enterprise value from an initial estimate of $117 billion to about $111 billion. This decline coincides with worries expressed by analysts about Jio’s profitability being impacted by slower revenue growth and higher operating expenses. The telecom giant’s challenges in sustaining its development momentum in a competitive market and the significant investments needed for 5G infrastructure are highlighted by the new value.

Important Elements of the Valuation Cut

The decrease in dependence The two main issues influencing Jio’s valuation are:

  • Difficulties with Revenue Growth: Analysts think Jio is seeing slower-than-expected revenue growth, despite the company’s attempts to increase rates in an effort to boost revenue. The large revenue increases that were first predicted are not being realized as a result of the anticipated tariff hikes, which were supposed to raise Average Revenue Per User (ARPU). Even if Jio’s ARPU has somewhat increased, analysts at companies like ICICI Securities pointed out that the growth rate is not as rapid as initially anticipated, particularly in comparison to its rivals in the market. The company’s capacity to reach the long-term growth goals established by investors is under strain due to the slower-than-expected revenue growth.
  •  Growing Operational and Capital expenditures: The company’s growing operational expenditures, especially those associated with the rollout of its 5G network, are a major cause for concern. The price of purchasing 5G spectrum has increased interest costs, which have increased by almost 34% annually. Jio’s margins are being eroded by these cost increases, which is making it more difficult for the business to reach the high levels of profitability that investors had first anticipated. The sales, general, and administrative (SG&A) expenses, which increased 42% year over year to ₹1,980 crore in the most recent quarter, were also significantly more than anticipated, according to analysts.
    Analysts have revised their estimates for Jio’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a result of these growing expenses as well as the difficulties in generating revenue. Although the EBITDA margin for Q4 FY25 stayed constant at 52.8%, cost pressures indicate that it would be challenging to sustain this level of profitability in the future.

 Jio’s Performance Despite the decrease in valuation

The company is still doing well in a number of crucial areas, despite the fact that the valuation reduction indicates difficulties for Reliance Jio. In Q4 of FY25, Jio’s net profit after tax (PAT) is expected to increase by as high as 19–25% on an annual basis. A strong subscriber base that keeps growing and an increase in ARPU are the main causes of this.
The income of Jio is expected to rise by 15–17% annually, reaching between ₹29,800 crore and ₹33,836 crore, according to estimates. An estimated 6 million net additions for the quarter, including 2 million from Jio’s (Fiber to the Home) and Fixed Wireless Access services, are expected to sustain this increase.
Despite the strong revenue growth, experts are paying more attention to Jio’s business model’s long-term viability. Despite skepticism among analysts regarding Jio’s ability to further increase its ARPU amid intense competition from Vi and Airtel, projections suggest an uptick to approximately ₹204.8, compared to ₹203.3 in the preceding quarter.

The Competitive Environment and Jio’s Approach

Jio has a difficult time converting its growing subscriber base into improved ARPU and profit margins in the fiercely competitive Indian telecom industry. India’s telecom market is highly competitive; Bharti Airtel recently raised its rates and reported a 17% increase in ARPU as a result of the change. Reliance Jio’s rate increases, on the other hand, are anticipated to result in a revenue growth of just roughly 13%, which is below that of its rivals.
In addition to long-standing competitors like Airtel, there are also new competitors and quickly shifting consumer tastes, such as the growing need for 5G services. Jio has to deal with the growing expenses related to its ongoing significant investments in developing its 5G infrastructure. According to analysts, Jio may face increased pressure to reduce its 5G investments or raise more money if its pricing hikes do not produce appreciable revenue increases. This could potentially influence the company’s financial performance.

Future Prospects for Reliance Jio

Reliance Jio must perform a careful balancing act in the future. Even while its subscriber base is still growing rapidly, sustaining long-term investor confidence requires converting this expansion into increased ARPU and enhanced profitability. Along with addressing the rising capital costs of 5G infrastructure, the business must also think about how to maximize operating costs and preserve margins.
Jio’s valuation change may cause investors to rethink their short-term projections for the business. Future advancements in the rollout of 5G or additional tariff increases, however, can potentially serve as a spur for fresh expansion.

Conclusion

In conclusion, a mix of slower revenue growth and growing operating costs is reflected in Reliance Jio’s valuation reduction. Despite its higher ARPU and robust subscriber growth, Jio still has a long way to go before reaching the profitability levels that investors had anticipated. To maintain its market position going forward, the business will need to proactively manage the difficulties posed by the 5G rollout, streamline its cost structure, and turn tariff increases into significant revenue growth.

 

 

 

 

 

The image added is for representation purposes only

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