"Falling per-GB data realisation alongside moderate ARPU growth raises questions about the financial sustainability of the telecom sector. Discuss." (10 m)

TRAI's Yearly Performance Indicators for 2025-26 show wireless data usage up 24.74%. Data revenue rose only 11.53%, so revenue realised per GB fell 10.59% to ₹8.02 [1]. Monthly ARPU growth also slowed to 3.59%, from 16.89% a year earlier [1][2]. Together these point to real strain on the sector's finances, though not yet a crisis.

Why sustainability concerns arise

• Volume without value: operators carry about 25% more data for about 12% more revenue. At the same time, 5G rollout and spectrum payments keep capital spending high [1].
• Fading tariff effect: ARPU moved only from ₹174.46 to ₹180.73 [1]. The FY25 jump came from tariff increases, and that boost has largely played out [2].
• Distorted base: FY26 figures now include Airtel's M2M SIMs, which it earlier left out [1]. These low-revenue machine connections drag down per-user metrics and make year-on-year comparison unreliable.
• Weak third player: about 41% of DoT's budget goes to reviving BSNL and MTNL, and both still make losses. BSNL also gets ₹28,473 crore of fresh capital in 2026-27 [3]. Competition is being kept alive with taxpayer money, not user revenue.
• Import-heavy capex: imports of telecom instruments rose 21% in 2024-25 [3], which raises network costs.

Why the picture is not wholly bleak

• Revenue still growing: wireless data revenue reached ₹2,39,874 crore [1].
• Deeper usage: average use is now 25.51 GB per subscriber per month (+18.49%) [1]. This gives operators a base for tiered and premium pricing.
• Supportive law: the Telecommunications Act, 2023 keeps spectrum allocation mainly through auctions. It also renames USOF as Digital Bharat Nidhi and allows its use for R&D [4]. This eases the private burden in loss-making areas.

The inclusion dilemma

• Rural subscribers grew only 3.20%, while urban rose 16.92% [1]. Steep tariff hikes to restore margins would hit the most price-sensitive users and widen the digital divide.

Low realisation, slower ARPU growth and state-supported competition together squeeze margins, even as usage booms. The way forward has four parts:

• gradual, predictable tariff increases;
• earning more from 5G through FWA and enterprise services;
• TRAI reporting M2M SIMs separately;
• targeted Digital Bharat Nidhi support so data stays affordable.

This would balance a viable industry with affordable, universal connectivity in line with SDG 9.