Bharat Sanchar Nigam Ltd (BSNL) has set an ambitious goal to increase its average revenue per user (Arpu) to ₹150 in the current fiscal year, reflecting a nearly 50% increase. This decision follows a recent review that highlighted concerns regarding stagnating core business revenues.
The target was established during a review meeting with Communications Minister Jyotiraditya Scindia on April 23. This initiative is particularly noteworthy as Reliance Jio, the leading telecom operator, reported only a 4% year-on-year Arpu growth in the March quarter.
BSNL's Arpu rose by 42% to ₹101 in FY26 from ₹71 the previous year. This figure is crucial as it indicates the average monthly revenue generated per subscriber, a key metric for assessing profitability.
Despite BSNL's management asserting that the company is entering a growth phase driven by increased data consumption from 4G services, analysts express skepticism regarding the sustainability of such a sharp Arpu increase. BSNL's annual reports indicate that cellular revenue has been relatively flat, with only a 3% growth in FY25, suggesting limited growth in user spending.
Parag Kar, an independent telecom analyst, noted that achieving the FY27 Arpu target of ₹150 would necessitate nearly 50% revenue growth from FY26 levels, which appears ambitious without significant improvements in network quality and pricing strategies.
Subscriber Growth and Network Modernization
BSNL's chairman and managing director, Robert Ravi, emphasized that the Arpu milestone reflects the successful rollout of 4G services and customer trust in BSNL's network modernization efforts. The company added 186,757 users in the January-March quarter, bringing its total subscriber base to 92.9 million.
Mobile Arpu is calculated by dividing revenue from mobile services by the number of active subscribers. An increase can occur due to higher user spending, a shift to premium customers, or a decline in active subscribers.
Ravi stated that with network stabilization achieved through government support, BSNL aims to expand its active user base through targeted engagement and improved service delivery. He refrained from commenting on potential tariff hikes.
Challenges in Core Business Revenue
During the review meeting, concerns were raised about stagnation in BSNL's core business revenue, which remained flat at 3% in FY26. The fourth quarter was particularly disappointing, with all major business segments missing their targets.
Ravi acknowledged the challenges, stating that the results of capital expenditure investments are beginning to show. He highlighted that reliable, high-quality connectivity encourages customer loyalty and increased usage.
Strategies for Increasing Arpu
To achieve the new Arpu target, BSNL has directed its regional heads to implement upselling strategies to encourage users to migrate to higher-value plans. In comparison, Reliance Jio's Arpu was ₹214, while Bharti Airtel and Vodafone Idea reported Arpus of ₹259 and ₹172, respectively.
Ravi noted that private operators typically operate from a much higher Arpu base, which is 2-3 times greater than BSNL's. To retain customers and prevent them from opting for lower-cost plans, BSNL aims to enhance the availability of high-quality over-the-top (OTT) content.
BSNL is also ramping up its network expansion, planning to deploy an additional 23,000 4G sites to bolster coverage and capacity. The company has already established 4G services on 100,000 tower sites nationwide.
Despite these efforts, BSNL reported a widening loss of ₹3,709 crore in the nine months ending December, compared to ₹2,521 crore in the previous year, although revenue from operations increased by 9.2% to ₹15,521 crore.
