Jio Platforms IPO, VIL capital raise, mobile tariff hikes: What BNP Paribas says

BNP Paribas in a note on telecom said the sector remains among its preferred   pick in India in 2026. It said the industry’s structure has improved as reflected in strong revenue growth, Ebitda margin improvement and a  moderating capex intensity. While valuation multiples have expanded, it expects healthy double-digit returns led by earnings growth.

"We see a strong likelihood of a mobile tariff hike in 2026, and  the sector is tapping new growth drivers, such as home broadband and data centres. Telcos have  ramped up their consumer offering by bundling content, cloud and AI, which can eventually be  monetised. We like Reliance Industries Ltd and Bharti Airtel Ltd. We recently downgraded Indus Towers Ltd to Neutral," it said.

BNP Paribas said all eyes would be on Jio Platforms IPO, which could raise the weightage of the sector in key indices. It noted that the DoT recently provided relief to Vodafone Idea Ltd (VIL) on its AGR dues. It does not expect this to have any meaningful impact on the Indian mobile market share trends in 2026. Watch out for capital raise by VIL, it said.

Mobile tariff hikes 
BNP Paribas said Indian telecom operators have been raising tariffs by 15-20 per cent once every two years. It expects the next tariff hike by June-July 2026. Last three  meaningful tariff hikes happened in July 2024, November 2021 and November 2019.

Jio Platforms IPO 
Citing media report, the brokerage said preparations for the IPO are underway. Jio Platforms has the potential to be the largest IPO in India in 2026.  It said post Jio's listing one would have two large-listed telecom operators in India, which could result in an increase in telecom  sector weightage in the indices.

VIL capital raise 
BNP Paribas said the Supreme Court had in November 2025 allowed the government to take action that might be needed to support Vodafone Idea Ltd. Subsequently, this month, the DoT allowed VIL an additional 10 years to pay the AGR dues without any additional interest.

"This should ease the debt  concerns for VIL, in our view. Next steps, which could include debt/equity capital raise  and an acceleration in network investments, will be watched out for," it said,

From its coverage  perspective, strengthening of VIL’s balance sheet and network investments is seen positive for Indus Towers. "However, we believe the positives are already reflected in the stock price after the 35% rally last year," BNP Paribas said.

Data center investments 
BNP Paribas said both Reliance Industries and Airtel (through its Nxtra  subsidiary) are looking to make large investments in data centers. Investors’ interest in  the data centers opportunity has increased, and more details are expected to be available  through the course of 2026.

Indus Towers: Dividend reinstatement 
BNP Paribas said Indus Towers’ long-term cash flows remain  linked with Vodafone Idea collections. DoT has recently provided relief to VIL, and it believes this could pave way for the much-awaited dividend reinstatement at Indus Towers.

Capex intensity

BNP Paribas said Indian telecom operators are seeing strong revenue and Ebitda 
growth while their capex intensity has moderated in the last two years. Leaving aside investments in growth opportunities such as data centers, it sees capex to sales to decline further in 2026.