research report on telecom sector in india

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Telecommunications

Indian telecom industry analysis, india plans to manufacture mobile phones worth us$ 126 billion by 2025-26., advantage india, robust demand.

* In India, the total telephone subscriber base stood at 1,199.28 million in March 2024. Tele-density of rural subscribers reached 59.19% in March 2024.

* Total volume of wireless data usage increased by more than 10 folds from 4,206 petabytes in Q1, FY18 to 47,629 petabytes in Q2, FY24.

* Also, India is one of the biggest consumer of data worldwide. As per TRAI, average wireless data usage per wireless data subscriber was 19.47 GB per month in December 2023 from 61.66 MB in March 2014.​

Attractive Opportunities

* India's 5G subscriptions to have 350 million by 2026, accounting for 27% of all mobile subscriptions.​

* The value of export of mobile phones in FY24 increased by 42% reaching at US$ 15.6 billion.

* By 2025, India will need ~22 million skilled workers in 5G-centric technologies such as Internet of Things (IoT), Artificial Intelligence (AI), robotics and cloud computing.

* India ranks 2nd in "international mobile broadband internet traffic" and "international Internet bandwidth."

Policy support

* The Union Cabinet approved Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) scheme for telecom & networking products under the Department of Telecom. On December 2022, 42 companies have committed an investment Rs. 4,115 crore (US$ 502.95 million) comprising 28 MSMEs and 14 Non-MSMEs (eight domestic and seven global companies) approved under the PLI Scheme. To drive the development of 6G technology, the Department of Telecommunications (DoT) has developed a sixth-generation (6G) innovation group.

Increasing Investments

* In Union Budget 2023-24 the Department of Telecommunications was allocated Rs. 97,579.05 crore (US$ 11.92 billion). Of this, Rs. 400 crore (US$ 48.88 million) is for Research and Development, Rs. 5,000 crore (US$ 611.1 million) is for Bharatnet.

* FDI inflow in the telecom sector stood at US$ 39.32 billion between April 2000- March 2024.​

* The PLI plan for Large Scale Electronics Manufacturing received about Rs. 4,700 crore (US$ 569.49 million) in investment as of September 2022.

Telecommunications Industry Report

India is the world's second-largest telecommunications market. As of December 2023, tele-density stood at 85.23%. In India, the total telephone subscriber base stood at 1,190.33 million in December 2023.

As of December 2023, the wireless subscribers base stood at 1,158.49 million. As of December 2023, the wireless subscriber base of Jio stood at 459.81 million, followed by Bharti Airtel (257.37 million), Vodafone Idea 127.28 million, and BSNL (21.28 million).

Total broadband subscriptions in the country grew from 149.75 million in FY16 to 904.54 million in FY23 (April-December). The number of wired broadband subscriptions stood at 38.35 million in FY24 (April-December). Wireless broadband subscribers stood at 866.19 million in FY24 (April-December). As of December 2023, the top five service providers were as follows: Reliance Jio Infocom Ltd stood at 470.19 million, followed by Bharti Airtel (264.76 million), Vodafone Idea 127.29 million, and BSNL (25.12 million).

In April-September 2023 India’s Internet subscribers reached 918.19 million of which 37.11 million were wired subscribers and 881.08 million were wireless internet subscribers.

India is also the second-largest country in terms of internet subscribers. India is one of the biggest consumers of data worldwide. India was the second-largest market for Google Play in 2019 and was estimated to grow at a compound annual growth rate (CAGR) of 11% between 2018 to 2022. In 2020, India accounted for 14% of the global app installs. Indians downloaded over 28 billion apps on their mobiles in 2022 and accounted for 5% of the 625 billion downloads globally. App downloads in the country increased from 12.07 billion in 2017 to 19 billion in 2019. The Government of India intends to establish one hundred labs for creating applications using 5G services in engineering universities as part of the Union Budget 2023, in order to realize a new range of possibilities, business models, and job potential.

The aggregated data consumed as of September 2023, was 73,23,038 GB. The total wireless data usage in India grew at a rate of 5.9% from 44,967 PB in June 2023 to 47,629 PB in September 2023. Out of total data wireless usage, 2G data usage was 46 PB, 3G data usage was 353 PB, 4G data usage was 42,505 and 5G data usage was 2,063 PB during the (April 2023- June 2023) quarter. The contribution of 2G, 3G, 4G and 5G data usage to the total volume of wireless data usage was at 0.10%, 0.78%, 94.53% and 4.59%.

Gross revenue of the telecom sector stood at Rs. 82,741 crore (US$ 9.99 billion) in the second quarter of FY24. Strong policy support from the Government has been crucial to the sector’s development. Foreign Direct Investment (FDI) cap in the telecom sector increased to 100% from 74%. In October 2021, the government notified 100% foreign direct investment (FDI) via the automatic route from the previous 49% in the telecommunications sector.

FDI inflow in the telecom sector stood at US$ 39.31 billion between April 2000-December 2023.

To make India 5G-ready, there's a push for fiberisation of telecom towers. Currently, 36% of towers are fiberized, and plans involve deploying 12 lakh towers.

In May 2023, STT GDC invested Rs. 2,000 crore (US$ 242.33 million) in two more data centres in Pune.

As of March 2023, Jio partnered with EESL to provide 1 million smart prepaid meters in Bihar.

In February 2022, Bharti Airtel acquired 10% strategic stake in a Singapore-based start-up, Aqilliz.

In January 2022, Google made a US$ 1 billion investment in Airtel through the India Digitization Fund.

According to a Zenith Media survey, India is expected to become the fastest-growing telecom advertisement market, with an annual growth rate of 11% between 2020 and 2023.

The Government of India, through its National Digital Communications Policy, foresee investment worth US$ 100 billion in the telecommunications sector by 2022. The government is encouraging global telecom network manufacturers such as Ericsson, Nokia, Samsung, and Huawei to manufacture all their equipment in India with 100% local products. The Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) scheme already triggered the entry of several global players manufacturing mobile devices and components. European telecom gear vendors like Ericsson and Nokia are eager to expand their existing operations in India for a global supply chain under the PLI scheme. Similarly, global vendors like Samsung, Cisco, Ciena, Jabil, Foxconn, Sanmina, and Flex have shown interest in setting up manufacturing in India for telecom and networking products under the newly announced PLI scheme.

As of March 2023, the PLI scheme for Large-Scale Electronics Manufacturing (LSEM) attracted investment of Rs. 5,998 crore (US$ 726.77 million) and led to a total production of Rs. 2,76,903 crore (US$ 33.55 billion), including exports of Rs. 1,28,886 crore (US$ 15.61 billion).

In March 2021, TEPC (Telecom Equipment Export Promotion Council) organised India Telecom 2021—a platform for convergence of technologies and business exchange.

In July 2021, Bharat Broadband Network Limited (BBNL), on behalf of the Department of Telecommunication, invited global tender for the development of BharatNet through the Public-private Partnership model in 9 separate packages across 16 states for a concession period of 30 years. Under this project, the government provided a maximum grant of Rs. 19,041 crore (US$ 2.56 billion) as viability gap funding.

In August 2021, the Department of Telecommunications (DoT) officials stated that it is working on a package, which includes reducing the revenue share licence fee to 6% of the adjusted gross revenue (AGR) of the operators from the current 8%. This would be done by reducing the 5% universal service obligation levy by two percentage points and providing relief of about Rs. 3,000 crore (US$ 403.63 million) annually to the operators.

In October 2021, Telecom Secretary Mr. K. Rajaraman inaugurated the Quantum Communication Lab at the Centre for Development of Telematics (C-DOT), Delhi, and unveiled the indigenously developed Quantum Key Distribution (QKD) solution by C-DOT. QKD can support a distance of >100 kms on standard optical fibre.

The Union Cabinet approved Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) scheme for telecom & networking products under the Department of Telecom.

Note: F- Forecast, PB - Petabytes

Related News

Nokia's upcoming establishment of the world's largest fixed network testbed in Chennai represents a notable advancement in the realm of ultra-high-speed internet technology.

Jio Platforms limited, has become one of the top 12 companies in India and accounting for 8% of global data traffic.

As of July, over 450,000 5G base transceiver stations have been installed in India, approaching the 500,000 targets for nationwide coverage.

The government plans to invest US$ 7.15 billion (Rs. 60,000 crore) over 5 years to upgrade ITIs, focusing on industry collaboration and outcome-driven skill development.

The Indian telecom sector saw notable growth in FY24, with teledensity rising to 85.69%, internet subscribers reaching 95.4 crore, and broadband subscriptions surging by 9.15%, reflecting robust sector expansion.

Telecommunication India

• Mahanagar Telephone Nigam Ltd. (MTNL)
• Bharat Sanchar Nigam Ltd. (BSNL)
• Bharti Airtel
• Vodafone Idea Limited
• Reliance Jio Infocomm

Industry Contacts

• Department of Telecommunication
• Association Of Competitive Telecom Operators (ACTO)
• Internet & Mobile Association Of India (IAMAI)

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Industry Scenario

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The Telecom industry in India is the second largest in the world with a subscriber base of 1.096 Bn as of Jun 2024 (wireless + wireline subscribers). India has an overall tele-density of 85.95%, of which, the tele-density of the rural market, which is largely untapped, stands at 59.65% while the tele-density of the urban market is 133.46%.

By the end of Mar 2024, the total number of internet subscribers increased to over 954 Mn (narrowband + broadband subscribers), out of which 41.73% of the internet subscribers belonged to the rural areas. The average monthly data consumption per wireless data subscriber has also increased to 17.36 GB GB in Mar 2023 from 61.66 MB in Mar 2014.

The industry’s exponential growth over the last few years is primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers, Government’s initiatives towards bolstering India’s domestic telecom manufacturing capacity, and a conducive regulatory environment.

To further expedite digital connectivity, the Government has approved the auction of IMT/5G spectrum for deployment of 5G services within the country. This auction was successfully held by the end of Jul 2022 and grossed $18.77 Bn.

The Telecom sector is the 4th largest sector in terms of FDI inflows, contributing 6% of total FDI inflow, and contributes directly to 2.2 Mn employment and indirectly to 1.8 Mn jobs. Between 2014 and 2021, the FDI inflows in the Telecom sector rose by 150% to $20.72 Bn from $8.32 Bn during 2002-2014. 100% Foreign Direct Investment (FDI) has now been allowed in the Telecom

For further FDI details, please refer to FDI Policy read with Press Note. 4 . 

Broadband Connections (as on 30th Jun 2024)

Total employment

User Base of 5G

No. of smart cities

India currently has the world’s second-largest subscriber base of 1.09 Bn.

Active internet users in India are more than 950 Mn.

India is aiming to manufacture mobile phones worth $126 Bn by 2025-26.

• FOREIGN INVESTMENT
• INDUSTRY TRENDS
• POLICIES & SCHEMES

Tele-density, which denotes the number of telephones per 100 population, is an important indicator of telecom penetration.

The Telecommunications industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.

As per GSMA, India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 Bn installed devices and is expected to have 920 Mn unique mobile subscribers by 2025 which will include 88 Mn 5G connections. It is also estimated that 5G technology will contribute approximately $450 Bn to the Indian Economy in the period of 2023-2040. 

India added over 500 Mn new smartphone users over the last decade. We are expected to have 850 Mn smartphone users by 2026, representing ~55% of the total population.  

Under the Union Budget 2023, The Government of India plans to set up one hundred labs for developing applications using 5G services in engineering institutions to realize a new range of opportunities, business models, and employment potential.

The DoT is targeting a combination of 100% broadband connectivity in the villages, 70% fiberisation of towers, average broadband speeds of 50 Mbps and 50 Lakh kms of optic fibre rollouts at a pan-India level by Dec 2024. Broadband connections rose to 924.07 Mn in Mar 2024 from 61 Mn in Mar 2014, growing by 1414%. 

• India is placed at 60th rank as per Network Readiness Index 2023
• India secures 2nd rank in “Mobile broadband internet traffic within the country” and “International Internet bandwidth”.
• Internet connections jumped from 251.5 Mn in Mar 2014 to over 954.4 Mn in Mar 2024.
• Average revenue realization per subscriber per GB wireless data reduced to INR 9.94 in March, 2023 from INR 268.97 in December 2014, a reduction of more than 96.30%.
• India secures 3rd rank in “Annual investment in telecommunication services” and “Domestic market size”.
• 5G network has been rolled out in all 28 states and 8 UTs.
• India, in terms of median mobile broadband speed, has reached 43rd position.  
• Total telephone connections rose to 1205.64 Mn in Jun 2024 from 933 Mn in Mar 2014, with a growth of 29.22 % in the said period. The number of MNP requests submitted were 11.84 Mn in Jun 2024.
• Urban telephone connections rose to 667.13 Mn in Jun 2024 from 555.2 Mn in Mar 2014, a growth of 20.1% while the growth in rural telephone connections was 42.5%, which is double of urban increase, rising from 377.8 Mn in Mar 2014 to 538.51 Mn in Jun 2024. The rural tele-density jumped from 44% in Mar 2014 to 59.65% in Jun 2024.

GROWTH DRIVERS

Pli schemes under atmanirbhar bharat abhiyan.

Production Linked Incentive (PLI) Scheme worth INR 12,195 Cr for manufacturing of telecom and networking products. Incentives worth more than INR 4,000 Cr have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.

Telecom Sector Reforms

In 2021, large scale structural and procedural reforms have been brought in to enhance liquidity and minimise financial stress within the telecom sector.

Bharatnet project

Under the BharatNet Project 1,77,550 Gram Panchayats (GPs) have been made service ready till June 2022. Scope of BharatNet Project has been extended to all inhabited villages in the country.

India is one of the highest consumers of data per day

India is one of the highest consumers of data per day with approximately 5 hours of daily time spend on smartphones.

Prime Minister Wi-Fi Access Network Interface (PM-WANI)

Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services.

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi had given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Telecom & Networking Products sector for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. In June 2022, the Department of Telecommunications (DoT) amended the guidelines for PLI Scheme to introduce Design-led Manufacturing Scheme as part of the PLI Scheme with additional incentives worth more than INR $533.33 Mn. Applications closed on 20th July 2022. Achievements: • Total 31 applicants have been approved under the Scheme, out of which 16 are MSME, 8 Non- MSME (Domestic) and 7 Non-MSME (Global). These companies are expected to invest $450 Mn, generate 40,000 jobs and incremental production of over $24.4 Bn throughout the tenure of the PLI Scheme. • INR 1330 Cr investments has been generated till Feb 2023.

INR 12,195 Cr

Scheme Outlay

• Department of Telecommunications
• Core Transmission Equipment
• 4G/5G, Next Generation Radio Access Network and Wireless Equipment
• Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices and Other Wireless Equipment
• Enterprise equipment: Switches, Router

Industrial Land Bank Portal

Gis - based map displaying available infrastructure for setting up business operations in the state., investment opportunities in telecom.

Latest News

Karnataka-based telecom infrastructure provider, Kavveri Telecom deve…

Delhi and Mumbai service provider Mahanagar Telephone Nigam Limited (…

Noida-based Network Infrastructure provider, SAR Televenture, signs p…

Telecommunications major, Nokia completed its first 5G non-standalone…

Telecom major, Bharti Airtel bags a multi-year contract from the Cent…

C-DOT signs agreement with IIT, Roorkee and Mandi for “Development of ‘Cell-Free’ 6G Access Points”

Telecom equipment manufacturing sales cross INR 50,000 Cr milestone under PLI Scheme

The Telecommunications Act 2023: Ushering in a New Era of Connectivity

Bharat 6G Alliance forms Strategic Partnership with 6G IA of Europe and 6G Flagship of Oulu University,…

C-DOT and Qualcomm sign MoU towards Atmanirbhar Bharat and driving Design and Make in India vision

C-DOT and IIT Roorkee sign agreement for Developing 140GHZ Fully Integrated Transmitter & Receiver Module for…

REC signs MoU with RailTel, to Finance Infrastructure Projects in Telecom, IT and Railway Signalling

Regulation on Rating Framework for Digital Connectivity in Buildings or Areas

Promoting Networking and Telecom Equipment Manufacturing in India

Giant strides that India took in the Telecom sector

Telecom at Glance

DoT extends PLI Scheme for Telecom and Networking Products to 42 beneficiaries

Sufficiency of Fibre Networks

PLI Scheme in Telecom and Networking Products

Year End Review 2022: Ministry of Communications

Rolling out of 5G Network

DoT under Atmanirbhar Bharat initiative

Gati-Shakti Vision for Telecom Infrastructure

Annual Report 2020-21 | Ministry of Communications

Investment Promotion Reforms in India

Union Budget 2021 - Key amendments impacting Telecom sector

Cabinet approves setting up of Public Wi-Fi Networks by Public Data Office Aggregators to provide public Wi…

Cabinet approves signing of the MoU between India and United Kingdom on cooperation in the field of…

Telecom Industry Scenario in India | May-Jun 2020

Press Release

C-DOT signs agreement with IIT, Roorkee and…

Telecom equipment manufacturing sales cross…

The Telecommunications Act 2023: Ushering in…

Bharat 6G Alliance forms Strategic…

Memorandum of Understanding

C-DOT and Qualcomm sign MoU towards…

C-DOT and IIT Roorkee sign agreement for…

REC signs MoU with RailTel, to Finance…

Regulation on Rating Framework for Digital…

Promoting Networking and Telecom Equipment…

Giant strides that India took in the Telecom…

DoT extends PLI Scheme for Telecom and…

Press release

Year End Review 2022: Ministry of…

Annual Report

Annual Report 2020-21 | Ministry of…

Budget Report

Union Budget 2021 - Key amendments impacting…

Cabinet approves setting up of Public Wi-Fi…

Cabinet approves signing of the MoU between…

Telecom Industry Scenario in India | May-Jun…

Frequently Asked Questions

100% FDI is allowed in the telecom sector under automatic route.

Was it helpful?

Some key incentives for investors in the telecom sector are:

• Basic customs duty (BCD) and special additional duty have been withdrawn.
• Importers of mobile handset components such as chargers, adaptors, batteries and wired handsets need to pay only the countervailing duty of 12.5%.
• A duty advantage of 10.5% exists for local manufacturers of mobile speakers and batteries

100% FDI is allowed in the telecom sector under the automatic route.

For more information, click here [1]   [2]

Deductions claimed on account of PSTN related call charges and roaming charges (Pass through charges/Interconnect Usage Charges) actually paid to eligible Telecom Service Providers and Sales Tax & Service Tax (if included in the Gross Revenue) actually paid to Government are admissible.'

For more information, click here .

Inter-Company/Group Company transactions are those which occur between two separate legal entities e.g. transactions occurred between RCOM and RTL or transactions occurred between Vodafone Ltd and Vodafone South Ltd. are example of Inter-Company/Group Company transactions. Pass through charges between two legal entities may be routed through the bank only and not through mere ledger adjustment.

Whereas, Intra-Company/Group Company transactions are those which occur within same legal entity e.g. transactions occurred between RCOM, Delhi and RCOM UP (East) or transactions occurred between Vodafone South Ltd, AP and Vodafone South Ltd., Karnataka are example of intra-Company/Group Company transactions.

Please Note: Names of Companies used are for reference/illustration only.

Market Research

Economic survey 2023-24, annual report 2022-23 | department of telecommunication, union budget 2023-24: analysis report, economic survey 2022-23, the indian telecom services performance indicators april – june, 2022, government ministry/ department.

• Department of Telecommunications Ministry of Communications (DoT)
• Telecom Regulatory Authority of India (TRAI)

Industry Association

• Cellular Operators Association of India
• GSM association (GSMA)
• Indian Telecom Industries Limited (ITI)
• Internet and Mobile Association of India (IAMAI)
• Digital Infrastructure Providers Association (DIPA)
• Doing Business in India
• Team India News

• Telecommunications and Computing /

India Telecoms Industry Report - 2023-2030

• December 2023
• Region: India
• Idem Est Research
• ID: 5917581
• Description

Table of Contents

Executive summary, companies mentioned, methodology, related topics, related reports.

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This report provides analyses of revenue and market forecasts as well as statistics of the India telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure and also features the following:

• Overall Telecommunications Market by Major Operators
• Telco Operators Profile, Revenue and EBITDA Mix
• Mobile Subscribers & Revenue Market Overview and Forecasts
• Spectrum Holdings
• IoT Market Overview
• Broadband Subscribers & Revenue Market Overview and Forecasts
• Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
• Telecom Tower Market Analysis and Forecast
• Thematics/Opportunities relating to 5G, M&A and e-Commerce
• Telco M&A Transaction Database

Why You Should Buy The India Telecoms Industry Report:

• Benefit from the latest market opportunities
• Understand the threats to your operations and investments and protect your company against future risks
• Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market
• Get a full view of the competitive landscape to assess your market position.
• Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
• Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
• Assess the activities, strategy, and market position of your competitors, partners and clients via the Operators Profiles

The India Telecommunications Industry Report, 2023-2030 includes a comprehensive review of the Indian market dynamics, market sizing, market forecasts, analysis, insights and key trends.

India Telecoms Industry Report at a Glance

Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. The publisher expects the Indian telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to geopolitics and rising inflation.

Growing mobile phone penetration and emerging fixed broadband take-up among households will fuel future growth over the next five years.

According to our India Telecoms Report, the publisher forecasts that mobile subscriptions and fixed broadband subscribers will continue to fuel the telecoms sector growth in the 2023-30 period. More than 700m people became Internet users over the last six years and another 200m more Internet users are expected to come online over the next six years by 2030.

Market Dynamics and Technological Evolution

The introduction of 4G technology marked a turning point for the Indian telecom market, driving a shift from voice-centric to data-centric services. Mobile data has become integral to digital initiatives and e-governance, underpinning the sector’s growth. However, more needs to be done to increase 4G coverage to the all Indian population with an estimated 1m more mobile towers to cover most of India’s population.

Government initiatives such as ‘Digital India’ aim to create a digitally empowered society, pushing for broader digital payment platforms and broadband accessibility. However, the sector faces challenges like high competition, regulatory uncertainties, and infrastructure issues, particularly in rural areas. Financial stress, highlighted by high debt levels and the complexity of Adjusted Gross Revenue (AGR), adds to these challenges.

The telecommunications industry in India is at a critical juncture, requiring supportive policies, regulatory stability, and continuous investment to overcome these challenges and harness its full potential.

Market Composition and Revenue Trends

The market comprises three major operators with mobile and fixed networks - Bharti Airtel, Reliance Jio, and Vodafone Idea - alongside two state-owned operators and several smaller fixed network operators. The reported market revenue grew from INR 2.6 trillion in 2016 to INR 3.2 trillion in 2022. This growth is attributed mainly to mobile service and fixed broadband revenue expansion. Despite the earlier decline in legacy voice and SMS revenues, market growth is expected to continue steadily towards 2030.

Capital Expenditure and Investment Trends

Capital expenditure (Capex) in the sector has seen dynamic shifts over the years. The overall market Capex decreased from INR 1006 billion in 2016 to INR 970 billion in 2022. Operators like Jio have heavily invested in building out their networks, while others like Vodafone Idea have focused on merger synergies and the elimination of redundant infrastructure. Bharti Airtel, in response to Jio’s aggressive market entry, increased its Capex in 2022 to accelerate its 5G rollout.

Future Prospects and Growth Forecast

The publisher forecasts that mobile subscriptions will grow at an annual average rate of 2% from 2023 to 2030, and fixed broadband subscribers at an average rate of 12.6% over the same period. With nearly 700 million Indian people becoming Internet users in the last six years, and an additional 200 million expected by 2030, the sector is poised for substantial growth. This growth, however, needs to be supported by innovative strategies to enhance industry revenues and profitability while managing the extensive debt burden.

The Indian telecommunications sector stands as a key driver of the country’s socio-economic development. With its vast potential for growth, the industry’s success hinges on its ability to adapt to technological changes, manage financial health, and meet the burgeoning data needs of one of the world’s largest internet user bases. A balanced approach to growth, innovation, and regulatory frameworks will be crucial in shaping the future of telecommunications in India.

According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive.

Broadband Subscribers - FTTH Push and Fixed Wireless

The fixed broadband market is experiencing strong growth mostly driven by the loss of share by the incumbent BSNL, followed by Bharti Airtel, Atria Convergence Technologies (ATC), Reliance Jio, ONEOTT, Excitel, GPTL and Vodafone Idea via its subsidiary You Broadband, all are now investing in full-fibre networks.

However, more competition is expected in the fixed broadband market with Jio’s entry with its residential fibre broadband services disrupting incumbent BSNL but increasing the residential broadband subscriptions significantly.

Fixed broadband penetration is forecasted to grow strongly as India’s investments on full-fibre networks are starting to pay off with affordable packages and increased broadband household penetration growing.

Thematics - Telecoms Infrastructure/5G/M&A/Infrastructure

Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

Our India Telecoms Industry Report transactions database analysis highlights the hive of transactions in the India tower market, with the majority of telecommunications operators shifting assets to infrastructure entities and selling down to repay debts and further investments for capacity and coverage of their mobile networks. However, in the short to medium term, the telco sector is likely to experience some corporate activity with the fixed broadband market, now expected to come under pressure with JioFiber’s launch and also broaden the scope of services beyond carriage to content and e-Commerce. The publisher projects strong earnings growth despite the huge debt pile and the looming required 5G and fibre to the home investments by the telecommunications operators. A new wave of M&A, network sharing deals over the next two to three 3 years will continue to consolidate around the large mobile operators, Bharti Airtel, Vodafone Idea and Reliance Jio.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

• Alliance Broadband
• American Tower Corporation (ATC)
• Asianet Satellite
• Atria Convergence Technologies (ACT)
• Bharat Sanchar Nigam Limited (BSNL)
• Bharti Airtel
• Eutelsat OneWeb
• GTL Infrastructure
• Hathway Cable
• Intech Online
• Kerala Vision
• Mahanagar Telephone Nigam Limited (MTNL)
• Reliance Communications (RCom)
• Reliance Jio
• Tata Communications
• Tata Play Broadband
• Vodafone Idea

The publisher uses primary and secondary research as well as proprietary information sources to generate market analysis and forecasts for fixed and mobile services in terms of both subscribers and revenue. Interviews are conducted with key service providers in the region to determine current and potential market sizing as well as future service offerings. Information gathered through interviews is further cross-checked to validate the total market size. The primary research is supplemented with a range of secondary source material, including related research, press releases, securities filings, media, Web-based materials, and trade publications. Industry and population statistics are also leveraged for reference and to ensure consistency in the data collection. Extensive service provider primary and secondary research, together with the publisher's end-user research database, provides a strong basis for sizing and forecasting the market. The multiple reference points allow for validation of information provided by the service providers compared with that gathered from alternative sources. Note: Forecasts are made in local currency, and no allowance is made for inflation. All numbers in this document may not be exact due to rounding.

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About the telecoms market.

The Telecommunications and Networks market is a highly competitive industry that provides a range of services and products to customers. It includes the provision of voice, data, and video services, as well as the development and deployment of network infrastructure. The market is driven by the need for reliable and secure communication, as well as the demand for faster and more efficient data transmission. The market is divided into two main segments: fixed and mobile. Fixed services include landline telephony, broadband internet, and cable television. Mobile services include cellular telephony, mobile broadband, and satellite services. The market is highly competitive, with a number of large players competing for market share. Companies in the market include AT&T, Verizon, T-Mobile, Sprint, Vodafone, Orange, and BT. Show Less Read more

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Teledensity Rises in India, Internet Subscribers Cross 954 Million: 2023-24 TRAI Report

The Indian telecom sector made significant strides during the financial year 2023-24. Between March 2023 and March 2024, the total number of internet subscribers in India increased by 8.3 percent, rising from 881.25 million to 954.4 million. India’s overall teledensity increased from 84.51 percent in March 2023 to 85.69 percent in March 2024, at an annual growth rate of 1.39 percent.

On August 14, 2024, the Telecom Regulatory Authority of India (TRAI) released its report titled “The Indian Telecom Services Yearly Performance Indicators 2023-24.” The report highlights that the sector’s gross revenue experienced an annual growth of 0.71 percent, rising from INR 3.33 trillion (US$39.6 billion) in 2022-23 to INR 3.36 trillion (US$40 billion) in 2023-24.

The Applicable Gross Revenue (ApGR) also rose by 6.38 percent, climbing to INR 3.23 trillion (US$38.4 billion) in 2023-24 from INR 3.03 trillion (US$36.1 billion) the previous year. This growth was primarily driven by heightened data consumption and consumer upgrades, resulting in an 8.24 percent increase in telecom providers’ Adjusted Gross Revenue (AGR), which surged from INR 2.49 trillion (US$29.6 billion) in 2022-23 to INR 2.7 trillion (US$32.1 billion) in 2023-24.

AGR refers to the revenue earned by telecom operators from their core services, such as the provision of mobile and internet services, after excluding certain deductions. In October 2021, the Department of Telecom (DoT) introduced the concept of the applicable gross revenue (ApGR), which is arrived at by removing all non-telecom revenues earned by telecom companies from their gross revenue.

India’s leading telecom service providers in FY 2023-24

Reliance Jio led the Indian telecom sector with 9.62 percent year-on-year AGR growth, rising from INR 892.79 billion (US$10.6 billion) in 2022-23 to INR 978.68 billion (US$11.6 billion) in 2023-24. Bharti Airtel followed with a 12.12 percent increase, reaching INR 805.29 billion (US$9.5 billion).

However, government-owned telecom service providers, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) faced declines of 1.92 percent and 22.34 percent, respectively, with MTNL’s AGR falling from INR 7.85 billion (US$93.5 million) in 2022-23 to INR 6.10 billion (US$72.6 million) in 2023-24.

In terms of the increase in telecom subscribers, the report notes that Reliance Jio Infocomm Ltd. added 42.42 million (net addition) telephone subscribers as of the end of March 2024.

Source: The Indian Telecom Services Yearly Performance Indicators 2023-2024 

Meanwhile, the telecom license fees in India saw an 8.45 percent rise, growing from INR 199.54 billion (US$2.3 billion) in 2022-23 to INR 216.42 billion (US$2.5 billion) in 2023-24.

However, spectrum usage charges (SUC) decreased significantly by 32.20 percent, dropping from INR 49.68 billion (US$592 million) in 2022-23 to INR 33.69 billion (US$401.5 million) in 2023-24.

Private players dominate India’s telecom market

As of March 31, 2024, private telecom service providers dominate the Indian wireless telephone subscription market, holding a 92.26 percent share. In contrast, public sector undertakings (PSUs), specifically BSNL and MTNL, account for only 7.74 percent of the market share. The Adjusted Gross Revenue share for PSUs declined to 6.64 percent in 2023-24, down from 7.04 percent the previous year. However, their AGR contribution slightly increased to INR 179.73 billion (US$2.14 billion) in 2023-24, up from INR 176.05 billion (US$2.09 billion) in 2022-23.

Regarding broadband subscriptions, mobile devices (including dongles and telephones) remain the predominant mode of access, making up 95.58 percent of total broadband subscribers as of March 2024. In contrast, wired internet subscribers represented only 4.33 percent of the total during the same period.

Surge in India’s telephone and internet subscribers in FY 2023-24

Source: TRAI

The number of telephone subscribers in India has increased from 1.17 billion in March 2023 to 1.19 billion in March 2024, with a growth rate of 2.30 percent.

Broadband subscribers increased from 846 million in March 2023 to 924 million in March 2024, showing a robust 9.15 percent growth, with 78 million new subscribers.

From March 2023 to March 2024, the total number of internet subscribers in India grew by 8.3 percent, increasing from 881.25 million to 954.4 million.

Wireless data subscribers grew from 846 million in March 2023 to 913 million in March 2024, with a 7.93 percent growth rate.

Data usage surged 21.69 percent, from 1,60,054 PB (Petabyte) in 2022-23 to 1,94,774 PB (Petabyte) in 2023-24.

(US$1 = INR 83.91)

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Case Study Telecom industry and competitive landscape in India: will MTNL and BSNL successfully recover?

IIM Ranchi Journal of Management Studies

ISSN : 2754-0138

Article publication date: 27 January 2022

Issue publication date: 1 March 2022

This case study aims to analyse the different factors that cause a decline in an organisation's performance. It projects data for the prospective case readers to explore the possible approaches for the Chairman-cum-Managing Director (CMD) of Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) to turnaround both the organisations. Furthermore, the case compels the readers to study the Indian Telecom industry to analyse the competitive behaviour and the consequent actions necessary to survive and thrive amongst their peers. From the theoretical perspective, the case emphasises the recent change observed in the Telecom industry regarding the transition from value-chain to value-network.

Design/methodology/approach

The authors collected the case facts and data for the case study from secondary sources like the latest news articles, the CRISIL database, company annual statements, company press releases and government regulatory body web portals.

The case study has identified the issues pertinent in the public sector companies in India, especially in the telecom sector, concerning leadership, pending government financial commitments and a slow-moving attitude towards taking action.

Originality/value

The case study highlights the management problems faced by the CMD of the two public sector telecom companies i.e. BSNL and MTNL.

• Indian telecom industry
• Competitive landscape
• Turnaround strategy
• Value chain
• Value network

Kumar, R. and Bose, P. (2022), "Case Study Telecom industry and competitive landscape in India: will MTNL and BSNL successfully recover?", IIM Ranchi Journal of Management Studies , Vol. 1 No. 1, pp. 82-98. https://doi.org/10.1108/IRJMS-12-2021-0179

Emerald Publishing Limited

Copyright © 2022, Rohit Kumar and Pallav Bose

Published in IIM Ranchi Journal of Management Studies . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode .

Introduction

On March 18, 2021, the Government of India (GoI) extended PK Purwar's additional charge for 6 months as the Chairman-cum-Managing Director (CMD) of Mahanagar Telephone Nigam Limited (MTNL) ( Economic Times, 2021b ). MTNL has its roots in Bombay Telephone, founded in 1882 ( MTNL, 2022 ) and now in 2021, is on the verge of closure ( Tripathi, 2019 ). Purwar, a 1990-batch of “Indian Post & Telecommunication Accounts and Finance Service” (IP&TAFS) with over 30 years of experience, also manages Bharat Sanchar Nigam Limited (BSNL) as CMD. He now has an uphill task to design and develop the revival strategy for both the telecom companies in the wake of high competition from private players like Reliance Jio and Bharti Airtel.

In 2021, India is gearing up for the adoption of 5G technology, with the government announcing the technology spectrum auction ( Ahmed, 2021a ), and Purwar has to oversee both companies' smooth transition to 5G technology. But before getting into the 5G space, Purwar has to address multiple challenges, from the crunch of skilled staff due to recent voluntary retirement adopted by 90,000 employees ( Jain, 2020a ) to losing customers to the competition, fund shortage ( Abbas, 2019 ), wage delays, dragged vendor payments and similar strategic issues. In October 2019, GoI announced to back up MTNL and BSNL with an INR 70,000 crore ( Doval, 2019 ) (960 million USD) revival strategy and to merge ( The Hindu BusinessLine, 2019 ) both the telecoms. However, in March 2021, the decision on the merger was kept on hold ( The Hindu, 2021 ). With this uncertainty, Purwar is expected to devise a revival strategy to survive both the telecom companies in India. Also, will the transition from a value chain to a value network work in the case of MTNL and BSNL? What should Purwar do to achieve this strategic transition?

About BSNL and MTNL

BSNL and MTNL are the oldest telecom service provider in the country and had seen it all, from the introduction of landlines to the present-day 4G hi-tech services. Starting 2021, they are expected to see through a significant transition in the telecom industry to launch 5G technology-enabled services.

The history of MTNL dates back to the pre-independence era of 1882 when Bombay Telephone started its operations. It was only on April 1, 1986, when the GoI set up MTNL to upgrade telecom services quality, introduce newer services and expand the network in the country's major metropolises – Delhi and Mumbai. MTNL is headquartered in New Delhi and without any listing in any of the country's major stock exchanges. MTNL currently holds 14.48% of the wireline market share and 0.28% of the wireless market share in India. The cumulative subscriber base of MTNL stands at 6.23 million as of February 2021 ( Telecom Regulatory Authority of India, 2021a ). The revenue of MTNL dropped from 300 million USD in FY19 to 270 million USD in FY20. Currently, customers choose from various services provided by MTNL, including basic telephone, 2G & 3G GSM, FTTH, ISDN, Broadband, leased circuits, IN service, Wi-Fi hot spots and data centres.

Since MTNL is a public sector enterprise, the organisation is awarded “Navaratna” ( Department of Public Enterprises, 2020 ) status by the GoI. MTNL took the first significant step after its setup was the large-scale introduction of the push-button telephone to make dialling easier. Subsequently, before the liberalisation of the telecom sector, MTNL had already introduced Phone Plus service in 1988 and Voice Mail service in 1992. The decade post-liberalisation saw MTNL introducing Internet services in 1995, ISDN service in 1996 and Wireless in Local Loop service in 1997. In 2000, MTNL endorsed a new wholly owned subsidiary, Millennium Telecom Limited (MTL). 2001 was critical for MTNL since it was jumping on to the business of mobile telecommunication. It launched GSM cellular service in India. The same year saw MTNL progressing with a joint venture in Nepal under the name United Telecom Ltd. Year 2003 saw MTNL introducing CDMA technology and a pilot project for providing broadband Internet services. In the same year, a wholly owned subsidiary of MTNL, under Mahanagar Telephone Mauritius Ltd, was launched in Mauritius. By 2004, MTNL had expanded its GSM and CDMA capacity by a total of 1.6 million lines. It also slashed its costly STD/ISD service rates by 60%. In 2005 MTNL officially launched its broadband Internet services and in 2006, launched IPTV services. In the same year, it started procuring WCDMA 3G service equipment. Subsequently, in 2008 and 2011, MTNL successfully launched 3G mobile services and FTTH services in India (see Table 1 ).

MTNL has two wholly owned subsidiaries, one in India, incorporated in 2000 as MTL, another one in Mauritius, incorporated in 2004 as Mahanagar Telephone Mauritius Limited (MTML). MTNL has two joint ventures, one with STPI (Software Technology Parks of India), incorporated in 2006 as MTNL STPI IT Services Ltd. (MSITS), with MTNL having 50% equity. The second one with Videsh Sanchar Nigam Limited (VSNL), Telecom Consultants India Limited (TCIL) and NVPL (Nepal Ventures Private Limited, a Nepalese Company) incorporated in 2001, as United Telecom Limited (UTL), with MTNL having 26.68% equity.

The history of BSNL dates back to the British era and is the country's oldest communication provider. It started the first telegraph line back in 1851 as part of the Postal and Telegraph Department in the British Period ( BSNLTeleServices, 2021 ). BSNL was incorporated in the year 2000 as an Indian telecommunications service provider owned by the Department of Telecommunications (DoT), Ministry of Communications, GoI, headquartered in New Delhi. BSNL offered landline services, and by 2002, it launched GSM-based mobile services popularly known as “CellOne” across all its telecom circles in India ( The Times of India, 2002 ). In 2005, BSNL launched its broadband Internet services under the name “Data One” in over 200 cities in India ( The Financial Express, 2015 ). Furthermore, in 2009 it launched 3G mobile services across 11 cities ( The Economic Times, 2009 ). In 2013, BSNL launched multi-protocol label switching (MPLS) technology to provide IP VPN services, thus providing corporate networking services ( Pandey, 2004 ). It claimed that this service would reduce 50% cost in comparison to the conventional leased line network. In 2018, BSNL launched a VOIP based phone service through an app under the name of “BSNL WINGS”, offering free audio/video calling services ( Dinakaran, 2018 ). BSNL launched fibre-to-the-home (FTTH) broadband service in 2020 to compete with JioFiber, Airtel and Tata Sky broadband services ( BSNL Launches New Bharat Fiber, 2020 ). In 2019, BSNL launched its 4G LTE services with the plans of expanding them to all the telecom circles ( India Today, 2019 ). BSNL introduced first in the world satellite-based IoT network in India in a partnership with Skylo ( Press Information Bureau, 2020 ). The motive was to connect with machines, industrial IoT devices and sensors in a single network (see Table 2 ).

As of February 2021, it is the largest provider of wireline telecommunication in the country, with a 33.75% market share and the fourth-largest wireless service provider with 10.14% ( Telecom Regulatory Authority of India, 2021b ). The cumulative subscriber base of BSNL stands at 125 million as of February 2021. The revenue of BSNL dropped from 2.36 billion USD in FY19 to 2.3 billion USD in FY20 ( BSNL, 2020 ).

The telecom industry in India

India has the world's second-largest telecom network in terms of telephone subscriber base, with a total of 1,187.90 million users registered by the end of February 2021 ( Telecom Regulatory Authority of India, 2021b ). The number of active wireless telephone connections in India rose from 584.32 million in 2010 to 1157.75 million in 2020 (see Figure 1 ). The Gross Domestic Product (GDP) contribution of the telecom industry is substantial and is steadily growing. Due to the booming telecom industry, India is witnessing an explosion in digital activities, which has aided the government to rely heavily on digital solutions to long-standing problems ( GSMA, 2017 ). The gross revenue from the telecom sector has touched Rs. 691.1 billion (USD 9.35 billion) in FY21, the 3rd quarter ( IBEF, 2021 ). The industry is anticipating the addition of 500 million Internet users due to the declining cost of data and mobile phone penetration over the next five years.

Indian Telecom sector – pre-liberalisation and post-liberalisation

The liberalisation policies embraced by the GoI in 1991 brought a paradigm shift in the Indian telecom sector. The sector saw a transition from a governmental monopolistic regime to that of an openly competitive environment. Before liberalisation, the telecom sector exhibited poor teledensity, high tariffs, low quality of services and poor customer satisfaction ( Gupta, 2015 ). Three crucial policy initiatives were introduced to curb these challenges, which paved the way for exponential growth in the telecom sector. The first policy was the National Telecom Policy, 1994 (NTP94). It highlighted the poor teledensity of the country at 0.8 per hundred people contrasting to the average world teledensity of 10 per hundred people ( National Telecom Policy, 1994 ). The policy introduced the establishment of a duopoly regime concerning two operators in the four metropolitan cities and each of the 18 telecom circles Government of India (2021) . Although the duopoly regime ensured the continuance of the government dominance in the telecom sector, this policy ensured protecting consumer interest and fair competition. It emphasised establishing a regulatory body and compelled the government to enact the Telecom Regulatory Authority of India (TRAI) Act 1997. The third policy implementation was the implementation of the New Telecom Policy 1999 (NTP99) ( Department of Telecommunications, 1999 ). It was brought in to handle the inadequacies of NTP94 and further liberalise the scope of the telecom services. Furthermore, it approved interconnection, shared resources among operators and replaced duopoly by the free entry of private players in the telecom sector.

Telecom customers and their increasing demands

The ever-increasing customer base has been attributed to the inflow of enormous investment in the form of FDI in this sector. The FDI in the telecom sector has been recorded to a total of USD 37.62 billion, which is the third-highest in terms of percentage of total FDI inflows Government of India (2020) . The number of mobile phones sold in India rose from 150.33 million in 2010 to 241.95 million in 2020 (see Figure 2 ). Also, the first quarter of FY21 saw a 16.6% y-o-y increase in customer spending on telecom services, of which 75% was on data services despite a lack of offline recharges during the COVID-19 restrictions. Scholars have identified that network and sales service quality is amongst the primary attributes of the existing and new prospective customers ( Ranaweera and Neely, 2003 ). With the advent of 4G technologies, the last decade has changed the perspective of a typical telecom customer demanding simple voice-based service to that of content-driven services like video calling, OTT platforms, mobile banking, to name a few.

A recent study suggests that the customer is now more informed and invested in gathering the service and product details ( Devadatta, 2017 ). The customers are more impressed by service providers, which empower them with exposure to maximum promotions and information, giving them the flexibility and ease to customise their services. Thus, the telecom sector is looking into the phenomenon of “customer-managed services”. This way of empowering the customers is taking the customers' experience to a new level of satisfaction while helping the telecom sector grow further by increased consumption of services, resource utilisation and improved profit margin.

Telecom value chain (upstream and downstream activities)

The telecom value chain can be divided into two broad categories – first, the services and applications related to the content and second, network architecture and access devices ( Sabat, 2002 ) (see Figure 3 ). There are several crucial players involved in the value chain with specific roles. Content providers primarily create content that is to be accessed by the subscribers through their devices. Then there are service providers who provide the necessary network, facilitating the subscribers to access the content. Next, the network infrastructure vendors are facilitating the required equipment to the network service providers. Finally, the mobile device vendors are providing necessary equipment to the final subscriber to access the content.

The first segment of the value chain related to content is divided into two categories. First, the content providers or content sources focus on the activities occurring in the upstream part of the telecom value chain. The second category constitutes the content enablers, i.e. OTT platforms, portals, system integrators, browsers and middleware solutions. These activities in this category mark the beginning of the downstream part of the telecom value chain.

Similarly, the second segment of the value chain is related to the network is further divided into two categories. First, the network infrastructure enables the secure transmission of the contents reliably to the subscribers to download and consume in their devices. This category of network infrastructure is further divided into core network equipment (router, node, servers and storage), radio access components (base stations, wireless modems, radios and circuits), hosting services, wireless LAN hardware, network operators and wireless service providers, and towers. The network operators and wireless service providers provision and manage the wireless network. The second category in the network segment is related to the user interfaces or access devices. The primary function of these devices is to provide access to the content consumable in audio-visual form. The basic access devices are handsets and personal computers. These devices need a basic display – a screen or audio output device – speaker and a browser. This segment signifies the core downstream activities involved in the telecom value chain.

From value chain to value network

The value chain perspective has limitations in terms of restricting the value creation to a single end product profiting a single organisation with a restriction on utilising the full potential of the connected players in the chain ( Peppard and Rylander, 2006 ). It was suitable for a physical product-based system like the wireline telephony. However, with the evolution of the end products, i.e. digitisation from the suppliers end to the final consumer deliverables, there is a need to shift from the value chain to the value network. Value network mainly deals with creating maximum value by combining values from the different economic actors in the system, i.e. suppliers, competitors and customers. The value networks consist of autonomous elements linked by service level agreement (SLA). Also, the position of the firm in these networks decides its performance and competitive advantage.

This can be seen in the case of the private telecom operators like Reliance Jio's collaboration with “Disney + Hostar VIP”, Vodafone-Idea's collaboration with “Zee5” and Airtel's collaboration with the “Amazon Prime”, “Disney + Hostar VIP” and “Zee5”, with the telecom operators' prepaid mobile recharge plans. In contrast, until July 2021, neither BSNL nor MTNL have collaborated with the OTT platforms for their prepaid mobile recharge plans, although OTT platforms are assessable through the broadband plan subscriptions of BSNL.

Competitors to watch

Currently, BSNL stands at the number one position for having the highest market share (subscriber base) in the wireline telecommunication services, whereas it has fourth in the wireless telecommunication sector. In the wireless sector, BSNL is behind Reliance Jio, Bharti Airtel and Vodafone-Idea (see Tables 3 and 4 ).

Reliance Jio

The services of Jio went public in September 2016, is currently India's most prominent and world's third-largest mobile network provider, with a total customer base of 426.2 million as of March 31, 2021 ( Reliance Industries Limit, 2021 ). It operates only on a 4G network in the 22 telecom circles and does not offer 2G or 3G services as fellow incumbent telecom service providers do. The company registered a 28.9% growth in data traffic in FY21, which stood at 62.5 billion GB (gigabyte). Jio introduced JioFiber, a fiber-to-the-home service, on its third anniversary in September 2019, offering a bundled set of services, ranging from television, telephone to broadband services ( Mukherjee, 2019 ).

Jio has a highly engaged 426 million customer base and remains committed to enhancing digital experiences not only for our existing customers but for all individuals, households, and enterprises across the country. With its path defining partnerships over the last couple of years, Jio will continue to strive towards making India a premier digital society. ( The Statesman, 2021 )

Bharti Airtel

Airtel is an Indian MNC telecom service provider with service stretching to 18 countries, providing 2G and 4G services. It is the second-largest mobile network operator in India and the world, with a worldwide customer base standing at 471 million, of which 350 million customers are from India, as reported till March 31, 2021 ( Airtel, 2021 ). In Q4 of FY21, Airtel witnessed the highest number (2,74,000) of customer addition. Furthermore, Airtel had successfully strengthened its network by adding a 355.45 MHz spectrum in its bandwidth. In 2020, Airtel was named as the most valuable Indian telecom brand and the fourth most valuable Indian brand by BrandZ Top 75 most valuable Indian brands ( Best Media Info, 2020 ).

We have one and only one guiding principle – customer obsession, and it is gratifying to see customers reward Airtel for constantly listening to them and innovating to serve them even better, especially at a time when the pandemic has redefined the normal. Today, Airtel has the highest number of active mobile subscribers in India, and more importantly, we believe we are leading in the hearts of customer ( Economic Times, 2021a )

Vodafone-Idea (VI)

VI is an Indian telecom service company providing 2G and 4G services with a consolidated subscriber base of 269.8 million as reported till Q3 of FY21 ( Vodafone-Idea, 2021a ). It has the third-largest mobile telecommunication network in India and the seventh-largest in the world. VI was formed in August 2018 from the merger of Vodafone India and Idea Cellular. It got its brand identity from the integration of the separate brands of Vodafone and Idea into a unified brand in September 2020 ( The Indian Express, 2020 ). Furthermore, VI became the fastest Indian telecom after passing the speed test certified by Ookla, with a continued streak for three consecutive quarters till March 2021.

With the introduction of VI Managed SIP service, VI is now in a position to be a single point facilitator of comprehensive fixed telephony solutions that enable businesses to gain better control of their overall voice infrastructure and the ability to garner meaningful insights on voice performance for their clients/ internal stakeholders. I am confident that this significant addition to our basket of best in class, holistic communications solutions for Enterprises, will help our customer organisations transform the way they communicate with their customers ( Ahmed, 2021b )

Telecom player's death due to competition

Over the last three years, the competition in the Indian telecom industry has forced some of the players to shut their shops. Companies forced to either file for bankruptcy, or sell their businesses, were Reliance Communication, Tata Teleservices – Tata Docomo and Aircel.

Reliance communication

Reliance Communication, also known as RCOM, founded in July 2002 (Reliance Infocomm Limited), was an Indian Telecom service provider that offered 2G and 3G services. It was the pioneer of nationwide CDMA2000 service introduced in 2002 ( Ganapati, 2002 ). The company was forced to shut down in 2019, and it filed for bankruptcy due to its failure to repay debt ( Thomson Reuters, 2019 ).

We have decided we will not proceed in this sector. Many other companies have taken a similar call. This is very much the writing on the wall ( Arun, 2019 )

Ultimately in 2019, after many unsuccessful attempts of revival, RCOM filed for bankruptcy.

Tata Teleservices – Tata Docomo

A subsidiary of Tata Group, Tata Teleservices Limited (TTSL) was the mobile network division of the group founded in 1996. Tata Docomo was the wholly owned subsidiary of TTSL. These companies were burdened by a load of debt and consistent losses. In November 2017, the companies were sold to Bharti Airtel with the transition of the existing customers to the Airtel mobile network by July 2019 ( Airtel, 2017 ).

They (Tatas) chose a costlier and better-optimised technology and made it a poor man's technology in India. So, they had to pay out bigger subsidies, leading to poor financials. That was a strategic mistake in the market, ( Airtel, 2017 )

They were not the fastest moving or decision-making company in the sector. The culture of long-drawn processes that work for older industry companies in the group spilled over to TTSL. When the industry was moving with faster decision making, they did not react that much. ( Airtel, 2017 )

Intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant negative business and reputational impact on the company ( India Today, 2018 )

Post detailed discussions with the financial lenders and shareholders; the company could not reach consensus regarding restructuring its debt and funding. Despite these discussions and the invoking of a strategic debt restructuring scheme in January 2018 … no agreement could be reached ( India Today, 2018 )

MTNL-BSNL merger: decision pending

Rationale and government support.

At present, both BSNL and MTNL are ailing due to their cash crunch, declining customer base, fierce cost-cutting competition from private players rolling out superior 4G services PAN India ( Tripathi, 2019 ). To revive BSNL and MTNL, the government approved a four-step process in November 2019, covering a capital investment of INR 70,000 crores (USD 960 million), merging the two telecoms. It was the third attempt to merge the companies. The first attempt was made in 2002 when the Telecom Ministry proposed that the merger would bring synergy between the companies. However, the attempt was unsuccessful due to large-scale opposition by the employee union. The second attempt was made in 2015 by the government. It commissioned IIM Bangalore to carry out a feasibility study of the merger and suggest a strategy to merge. However, it never got materialised either. As per the latest revival plan approved by the government, the four steps include – adjustment towards GST, voluntary retirement service (VRS) for employees, capital infusion towards 4G spectrum purchase and raising capital through sovereign bonds ( Lok Sabha, 2021 ).

However, in the latest turn of events, in January 2021, the government deferred the merger of the two companies citing both companies' high debts as a primary reason. The telecom ministry further noted the merger to be unfeasible and non-beneficial. The telecom ministry has implemented close cooperation and integration between the two companies ( Economic Times, 2021c ). The situation is indeed food for thought – can two mules make a racehorse? The revival plan lacks any comprehensive plan for the merged entity integrating the organisation's people and works culture. Whereas deferring the merger has posed some serious challenges for Purwar. The revival plan was planning a capital investment of INR 70,000 crores (USD 960 million). Without any such investment for an indefinite period, Purwar needs a plan to manage the enormous debt for both MTNL and BSNL. Furthermore, the 4G spectrum allocation as part of the revival plan has also been stalled for an unspecified period.

Current challenges

Leadership challenges.

Both BSNL and MTNL have been criticised in the past for their inefficient leadership succession plans. In 2014, Kapil Sibal, the then telecom minister, pointed out the need for mandatory evaluation of the extension of service for the outgoing CMDs ( Parbat, 2014 ). Furthermore, the employee union of BSNL had charged the organisation with failed HR policies due to its inability to pay its salaries ( Abbas, 2021 ). There had also been a case when the image of MTNL got tarnished due to corruption charges against CMD R S P Sinha ( The Indian Express, 2009 ). Sinha was relinquished from the position due to an allegation of fraud in a 2004 tender case. Both the PSU telecom companies are continually witnessing management related challenges in the tenure of Purwar as well. With the implementation of VRS for employees, the organisation is facing issues related to staff shortage at work, leading to a surge in customer complaints and more time in their resolution ( Johari, 2020 ). It further adds up to the list of challenges Purwar is currently facing. Purwar needs to think about whether young employees should be hired at this stage. If new recruitments are made, how will it impact the revival plan of both the telecom companies?

Entry of new players – satellite communication

Groundbreaking innovators are taking up the level of competition in the recommunication industry to the next level. Recently Elon Musk has ventured into the field of satellite communication. Musk's company SpaceX plans to launch 40,000 satellites under the name of Starlink ( News18, 2020 ). The project shall increase the Internet speed and provide extensive coverage of broadband Internet in remote locations.

The transition from value chain to value network

Both BSNL and MTNL are deeply invested in the wireline telephony business from the start of their journey. They are acutely embedded in the value chain system of running the business due to a lack of digitisation of their services. Furthermore, both the telecom players are predominantly vertically integrated with minimal third-party involvement as a public sector company. This is evident from the fact that none of the prepaid mobile recharge plans of the telecoms allows the customers to opt for an OTT platform. Now, this is a severe challenge for Purwar. All these drawbacks lead to less usage of data by the customers and hence fewer chances of enhancing the revenue for the companies. Purwar faces the challenge of shifting the organisation's focus from a value chain-based system to a value network-based system and collaborating with third party firms with an SLA system in place.

The silver lining – 5G spectrum auction

The Telecom Ministry had announced that both BSNL and MTNL would be allocated 5G spectrum on an administrative basis without any need for the companies to participate in the spectrum auction ( The Financial Express, 2021b ). The 5G spectrum allocation would be similar to the 4G spectrum allocation for BSNL in 2021-22. The formal telecom auction for the private players is supposed to occur by the end of 2021 or the beginning of 2022. Furthermore, the government sees 5G technologies as a catalyst for bringing in socio-economic reforms in the country ( Deloitte India, 2018 ). This new development can be a game-changer for Purwar since MTNL and BSNL see this opportunity and aspires to penetrate and proliferate into the country's remotest corners. The telecoms believe that the government should give them the best quality of spectrum available, i.e. the 700MHz frequency band, so that the socio-economic fabric of the country could be transformed ( TRAI, 2019 ). Now Purwar needs to figure out how to bank on this opportunity which shall be causing substantial financial commitments to other private telecom operators but not to BSNL and MTNL as they are public undertakings. The 5G spectrum shall be provided administratively (free of cost) to BSNL and MTNL by the GOI.

Way forward and closing remarks

With the set of challenges of the dwindling government telecoms and the opportunity of free 5G spectrum allocation, it is the task of Purwar to analyse the situation and come up with strategic steps to revive MTNL and BSNL. Would Purwar be successful in turnaround the declining phase of MTNL and BSNL, or, for the better sake, the once strategic asset of the government needs to be shut down? What should Purwar do? Should he make a transition attempt of the telecom value chain to a telecom value network? He contemplated the strategies he needed to adopt.

Wireless Telephone connections in India from 2010 to 2020

Mobile phone sales in India from 2010 to 2020

The mobile wireless value chain

Important milestones of MTNL