2026 Could Be A Turning Point For Jio, Airtel, And Vodafone Idea — Here's Why Citi Believes So

India’s telecom sector is heading into 2026 with two clear fault lines that will define investor outcomes. This involves the consolidation-driven strength of the top two players, and a high-stakes recovery phase for the weaker links, according to a new outlook from Citi.

The first framework centres on Reliance Jio and Bharti Airtel, where Citi sees a confluence of catalysts — tariff hikes, improving average revenue per user (ARPU), slowing capital expenditure, and rising free cash flows — coming together over the next two years.

The second framework focuses on Vodafone Idea and Indus Towers, where government relief, balance-sheet repairs and the return of dividends could determine survivability and sentiment.

Citi expects tariff hikes to underpin a 9–10% ARPU compound annual growth rate over FY26–28. However, the timing has shifted. The next major tariff increase is now expected to align with Jio’s much-anticipated listing, which Citi pegs for the first half of 2026.

As a result, its tariff hike assumption has moved to Q1FY27 from an earlier estimate of Q3FY26.

Over FY26–28, Bharti’s mobile ARPUs are forecast to grow at a 10% CAGR, while Jio’s blended ARPUs (mobile plus home broadband) are seen rising at 9%. The drivers are tariff hikes, deeper 5G and data monetisation, higher smartphone penetration, premiumisation, and incremental revenue from services such as international roaming and content bundles.

Citi flags Jio’s listing as a potential catalyst not just for Reliance Industries, where it could unlock value, but also for Bharti, by reinforcing tariff discipline across the sector.

Jio’s implied equity value in Citi’s sum-of-the-parts valuation for RIL has risen to about $140 billion.

In home broadband, Jio continues to pull ahead, having scaled up 5G fixed wireless access and commercialised ultra broadband ahead of peers. Citi expects over 40% CAGR in revenue and EBITDA contribution from this segment for Jio.

For Vodafone Idea, the government’s proposed AGR relief is expected to offer immediate cash-flow support rather than a full balance-sheet reset. While a reassessment of dues could reduce liabilities over time, near-term relief may help the telco remain a going concern and restart network investments.

Attention is now on the completion of its Rs 25,000 crore bank debt raise, a key trigger for Indus Towers resuming shareholder payouts.