Jio and Bharti Airtel sit at the centre of India’s telecom duopoly, but JM Financial’s latest assessment shows the strength heading into 2026 will not be evenly split. JM Financial believes that the visibility for a 15% tariff hike has increased sharply, with Jio’s plan to pursue an IPO in the first half of 2026 likely to push operators to raise prices.
The brokerage noted that keeping the “three-plus-one” market viable will require higher tariffs, since current prices do not show the cost of building and maintaining dense 5G networks. According to them, “tariff correction is no longer optional.”
JM Financial on Telecom: ARPU must rise to meet return expectations
The brokerage highlighted that Indian telecom will need ARPU to reach Rs 270–300 put the unit here by FY28 to generate a pre-tax RoCE of 12–15%, a level required to justify the heavy investment already made in spectrum, fibre and 5G rollouts.
JM Financial expects ARPU to rise at about 12% CAGR between FY25 and FY28, supported by:
- 6–7% CAGR from tariff hikes
- 5–6% CAGR from premium upgrades as operators withdraw low-value unlimited packs and guide customers toward plans that better match usage
These steps, it said, will help repair the pricing gaps that have widened as data consumption has accelerated.
JM Financial on Telecom: ARPU vs scale
Bharti Airtel’s wireless ARPU stood at Rs 256 in Q2FY26, well above Jio’s blended ARPU of around Rs 211, according to the brokerage. This shows Bharti Airtel focus on premium subscribers and its steady push toward higher-value plans.
Jio, however, has significant headroom for monetisation. The brokerage noted that Jio’s tariffs remain 5–10% lower than Airtel’s despite Jio offering broader 5G coverage. This gives Jio room to raise prices once it reaches its desired subscriber mix and begins monetisation ahead of its IPO.
Returns show a similar contrast. Bharti’s post-tax RoCE was 11.6% in FY25, about 200 basis points higher than Jio’s 9.4%. JM Financial said Bharti is ahead for now because it spent less on capex until FY25, but this gap is expected to narrow as Jio begins to benefit from the investments it has already made.
JM Financial on Telecom: The future battleground
JM Financial said the next phase of competition will revolve around high-capacity broadband. Jio holds about 75% of the 5G fixed wireless access (FWA) market, well ahead of Airtel’s 25%. Jio is adding nearly 0.9 million home broadband users per month, around three times Airtel’s 0.3 million additions. This pace, the brokerage said, puts Jio in a structurally stronger position as home broadband becomes central to revenue expansion.
The gap indicates early technology decisions. Jio invested around Rs 2 lakh crore in a full stand-alone 5G (SA) network and uses unlicensed band radio (UBR) for its FWA rollout. These choices required higher initial spending but reduce incremental expansion costs.
Airtel operates on a non-stand-alone (NSA) 5G network that runs on its 4G core. JM Financial said Airtel faces upside risk to capex as it transitions to an SA network over time to support next-generation services.
Pricing will also evolve. With India’s average monthly usage at 32.4 GB per user in 2QFY26, the highest globally, JM Financial said the current unlimited-data structure is difficult to sustain. It expects the industry to shift gradually toward pay-as-you-use models where heavier users pay more.
JM Financial on Telecom: Duopoly heads toward 2026
JM Financial expects free cashflow to improve for both operators. Bharti’s India free cashflow is projected to rise to Rs 49,100 crore in FY28, while Jio’s will reach about Rs 41,400 crore. Gains will come from lower capex intensity and steady ARPU expansion.
Valuations remain similar. The brokerage assigns an FY28 EV/EBITDA of about 12.4x to both Bharti’s India business and Jio’s telecom operations. But identical multiples do not capture the differences in business models and long-term positioning.
JM Financial’s core view is that Jio’s early investment in stand-alone 5G and FWA, combined with the financial discipline expected ahead of an IPO, places it in a stronger position to convert network assets into predictable earnings. It expects sector EBITDA to grow 14–18% CAGR between FY25 and FY28, driven by tariff hikes and better utilisation of existing capacity.
With Jio’s major investment cycle largely complete and Airtel preparing for the next phase of 5G spending, the long-term cashflow trajectory tilts toward Jio.