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Telecom Sector: Average Revenue Per User for Wireless Services Soars to Rs 138.75 in 2022-23 as per TRAI

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In Short:

The Indian telecom sector saw an increase in the average revenue per user (ARPU) for wireless services, from Rs 115.71 in 2021-22 to Rs 138.75 in 2022-23. Despite no tariff hikes, the ARPU growth was positive for telcos. Prepaid ARPU increased while postpaid ARPU declined. More data usage led to higher ARPU and total revenue. License fee for telecom sector increased due to higher gross revenues, while spectrum usage charges declined.

Indian Telecom Sector Witnessed Growth in ARPU for Wireless Services

The Indian telecom sector reported an increase in the average revenue per user (ARPU) per month for wireless services, rising from Rs 115.71 in 2021-22 to Rs 138.75 in 2022-23. This represented a yearly growth rate of 19.91%, according to the Telecom Regulatory Authority of India (TRAI) in its ‘Yearly Performance Indicators – Indian Telecom Sector’ report for the financial year 2022-23.

Despite no tariff hikes during the year, the growth in wireless services ARPU was a positive sign for the business of the telcos. Indian telecom operators provide mobile services in two segments – prepaid and postpaid. The ARPU per month for prepaid services increased from Rs 110.73 in 2021-22 to Rs 135.47 in 2022-23. However, the ARPU per month for postpaid services decreased from Rs 185.15 to Rs 176.73 during the same period.

Importance of Postpaid Segment for Indian Telcos

While the decline in postpaid ARPU is notable, the telcos prioritize increasing their overall postpaid subscriber base since it is a high-margin business for them. The focus is on attracting more high-paying customers to their network.

The growth in ARPU is largely driven by data consumption, with the number of wireless data subscribers increasing from 796.44 million to 846.21 million YoY. The total wireless data usage also saw a significant increase from 1,37,459 PB to 1,60,054 PB YoY, with a growth rate of 16.44%.

As a result, the total revenue generated from wireless data usage rose from Rs 1,43,169 crore in 2021-22 to Rs 1,74,144 in 2022-23, marking a yearly growth rate of 21.63%.

License Fee Increase for Indian Telecom Sector Due to Higher Gross Revenues

The gross revenue of telecom operators grew by 19.94% YoY, from Rs 2,78,216 crore in 2021-22 to Rs 3,33,697 crore in 2022-23. While spectrum usage charges (SUC) decreased by 29.75% YoY from Rs 7,072 crore to Rs 4,698 crore, the license fee saw an increase of 13.20% YoY from Rs 17,627 crore to Rs 19,954 crore due to higher revenues.

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