Growth begins in the village for Indian telcos

(RNS, 14-05-25) Rising internet adoption and growing data consumption among rural users are becoming key structural drivers of growth in average revenue per user (ARPU) for Indian telecom companies (telcos).

- 

To tap into this trend, telcos are expanding rural connectivity, which is expected to boost their data subscriber base and returns.

According to a Tuesday report titled “Telecom ARPU to rise 10-12% this fiscal as rural data usage surges” by rating agency Crisil Ratings, between January 2021 and December 2024, internet penetration in rural India increased significantly—from 59% to 78%—outpacing growth in urban areas, which rose from 77% to 90% (see Chart 1 in the annexure). Rural internet penetration is expected to rise another 4-5% by the end of fiscal 2026, driven by increased use of digital communication, mobile payments, social media, streaming services, and e-commerce.

Despite being more price-sensitive, rural users continued using mobile internet even after tariff hikes in mid-2024. This resilience underscores their growing dependence on mobile data.