Nearly a decade after a price war reshaped the telecom industry, the sector seems to be moving from a phase of recovery to one of reinvention, according to analysts.

Growth is no longer just about higher tariffs and the battle ahead will be defined by how operators employ strategies and business models to adapt in a saturated, competitive market even as new technologies such as artificial intelligence (AI) add to the dynamism.

ARPU gains plateau, new challenges emerge

While the average revenue per user (Arpu), once battered to below Rs 100, has recovered to breach the Rs 200 mark for the leading telcos, analysts caution the easy recovery is now behind.

“Expecting the elevated 14.3% revenue CAGR to persist is stretched, especially when the heavy lifting has already come from Arpu normalisation,” analysts from Emkay Research said.

With wireless internet penetration at 81% and subscriber additions slowing, the scope for further easy gains is narrowing. This is pushing operators on to different paths. Bharti Airtel, which has steadily grown its market share to 38% through heavy network investments, faces challenges about whether current valuations are sustainable. As Emkay analysts put it: “From this base, the case for another meaningful tariff-led Arpu step up is less compelling. Pushing harder risks churn in a price-sensitive market.”

Vodafone Idea, by contrast, remains weighed down by legacy spectrum dues and high leverage. Its ability to recover, Emkay observed, will depend largely on how the government addresses its debt obligations.

Jio bets on AI and digital revenues

Jio is already India’s largest operator across mobile, fixed broadband and fixed wireless access, carrying close to 60% of the nation’s data traffic. With peak 5G capex behind it, the company is shifting focus to digital and AI-driven services. “JPL was always designed as a digital/deep tech company by management,” analysts from BofA noted.

At the centre of this pivot is JioBrain, a new platform being developed to deliver AI tools and services at scale. “With an aim to streamline AI adoption, JPL is developing a comprehensive suite of tools and platforms called JioBrain,” the report said. The management expects digital revenues to grow by around 30% annually in the coming years.

The divergence highlights a turning point for Indian telecom, said experts. After years of repair through tariff hikes, the next phase will hinge on reinvention. Airtel is consolidating, Vodafone Idea is fighting for survival, and Jio is betting that the future of telecom lies in cloud, enterprise services and AI.