UBS: Indian telcos may raise tariffs by up to 12% next year

Navin Killa, Head of APAC Telecom, Media & Internet at UBS, expects India’s telecom operators to implement a tariff increase of 10–12% next year, marking the next leg of average revenue per user (ARPU) growth.Speaking to CNBC-TV18 on the sidelines of the UBS Summit 2025, Killa said, “Our view is that on a very broad level, the ARPU increase from here on should be around high single digits on a CAGR basis over the next three years. And the mix of that will probably be one big tariff increase sometime next year of around 10 to 12% and then from there on, a lot more measured price increases in future.”

He believes ARPU growth in India will continue to be supported by two key drivers — direct tariff hikes and gradual user upgrades with people moving from 2G to 4G, 5G, or from prepaid to postpaid.

He noted that India’s current mobile pricing structure is unusually flat, leaving limited differentiation between high-end and entry-level plans. “The gap between your most expensive plan versus your cheapest plan is very low compared to other emerging markets,” Killa said. He believes that widening this pricing gap after the next tariff revision will allow operators to tap richer customer segments and fuel the next stage of ARPU growth.
Also Read | Bharat Forge to focus on India, expands aerospace and defence businessesOn valuations, Killa said Indian telecom companies are trading at 12–13 times EV/EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortsation), compared with a global range of 5–8 times. “Granted, there is faster growth in India, but the fact is that there is a premium you pay for Indian telecoms,” he added.

He also addressed industry concerns around the Adjusted Gross Revenue (AGR) issue, noting that the Supreme Court’s recent decision could pave the way for a resolution. A possible capital raise by Vodafone Idea could restore it as a viable third private player.

For the full interview, watch the accompanying video

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