India’s ARPU growth outlook makes its telecom companies the preferred companies in Asia, said HSBC Global Research in its latest report looking at diversified telecoms in India.

India, Thailand and mainland China telcos outperformed in the region while Indonesia and Taiwan telcos underperformed, said the report. India had the lowest telecom spend amongst Asian consumers, at 1.3 per cent of GDP. In terms of annual revenue growth, HSBC described India as having relatively better growth with Bharti Airtel and Vodafone Idea (Vi) leading in terms of consolidated service revenue growth estimates for 2025. The two telcos also led in EBITDA growth estimates.

Looking forward, HSBC said India’s ARPU growth will remain robust, driven by the residual impact of tariff hikes, another estimated tariff hike in the first quarter of FY27, subscriber migration from 2G to 4G and migration to bigger data plans for higher usage. It also predicted robust growth in the home broadband segment due to a surge in adoption of fixed wireless access (FWA) service.

“We think Jio and Bharti Airtel are well placed to capture a share of household entertainment spend with their bundled home broadband plans which come with rich content offerings. Capex intensity should decline as 5G coverage capex is past peak levels,” said HSBC in the report.

HSBC selects Airtel as top pick

Bharti Airtel was the top pick in HSBC’s list of preferred telcos. It said that the company is well positioned for improved return on investment capital considering the margin expansion and improving invested capital turnover.

“We expect deleveraging to improve and dividends to quadruple in three years... We expect consolidated EBITDA and EPS CAGRs of [around] 15 per cent and 75 per cent respectively over three years. Structural growth drivers remain intact for the company: rising mobile ARPU, expanding home broadband subs with 5G FWA adoption, and rising FCF with lower capex intensity. We expect dividend to rise by 114 per cent annually to ₹17 per share in FY25 as FCF outlook improves and cash flow needs at the promoter entity rise,” said the report.