ICICI Securities has ‘good news’ for India’s two biggest telecom companies, Reliance Jio and Airtel

Bharti Airtel and Reliance Jio are poised to nearly double their returns on capital by 2028, as network spending falls below depreciation costs, unlocking robust cash flows after 15 years of heavy infrastructure investment, according to a new report by ICICI Securities. The report highlights that both telecom giants are entering a “value creation zone,” with Airtel’s return on capital employed (RoCE) expected to surge from 14.2% in FY25 to 28.4% by FY28, and Jio Platforms’ RoCE projected to rise from 14.3% to 21.4% over the same period. This shift follows a period of reduced capital expenditure (capex) compared to depreciation, enabling stronger free cash flows (FCF) that will support debt reduction and dividend payouts.