In 2024, the Indian telecom industry found itself navigating through a delicate and exciting phase of transformation. The sector, which has always been a cornerstone of the nation’s economic and technological growth, is facing an intricate web of competition, innovation, and regulatory shifts.

Among the most significant trends were rising Average Revenue Per User (ARPU), new government incentives aimed at revitalising the industry, and the growing divide between terrestrial telecom giants and satellite communications providers.

At the heart of these changes was the change of guard of the Ministry of Communications from incumbent Ashwini Vaishnaw to Jyotiraditya Scindia after the Narendra Modi government returned to power. Scindia’s tenure marked renewed optimism not only for the private players, but also for State-run Bharat Sanchar Nigam Limited (BSNL) that is now showing signs of recovery.

ARPUs surge: A sign of telecom’s resilience

For years, the Indian telecom market had been known for its cut-throat competition and incredibly low tariffs. However, 2024 brought a breath of fresh air as the industry’s ARPU – a key barometer to measure the health of companies – began to rise steadily across major players. This shift was a direct result of tariff hikes by companies like Reliance Jio, Bharti Airtel, and Vodafone-Idea — a long-awaited move after years of battling for market share through price wars.

Operators had managed to enhance the value they offered by bundling more premium services like 5G access, higher data allowances, and entertainment packages. The consumer appetite for better connectivity, faster data speeds, and exclusive content had grown over the years, and telecom companies began capitalising on this demand.

The ARPU increase was particularly notable because it marked a crucial phase in which the industry transitioned from merely surviving to witnessing growth. Operators, though facing the financial burden of 5G rollouts and infrastructure improvements, were finally seeing returns that made the market look more stable and profitable.

Government support: A lifeline for the Industry

Recognising the critical role of telecom in the nation’s digital infrastructure, the government introduced a new incentives aimed at boosting the sector’s financial health. One of the key initiatives was doing away with the provision of bank guarantees, which gave elbow room to telecom companies to save on expenditure and rather focus on creating liquidity for expansion and technology upgrades. The government has long emphasised that telecom is not just a utility but an enabler of progress in education, healthcare, and even governance.

These guarantees, along with other relief measures like tax cuts on equipment imports and regulatory easing, were vital in helping companies stay afloat and continue investing in critical areas like 5G networks, rural connectivity, and fiber-optic expansion. These efforts aimed not only at maintaining telecom services in metropolitan areas but also reaching the underserved rural regions.

“The Indian telecom sector is expected to end on a high note in 2024 with approximately 270 million 5G subscribers, which is roughly around 23 per cent of the total wireless connections base. India now boasts of 4,62,852 5G base stations (approximately 57 per cent of total towers in the country) – one of the fastest rollouts globally,” said Prashant Singhal, Markets Leader and Telecom Sector Leader at EY India.

With the steady adoption of 5G, mobile data usage has skyrocketed to 32 GB per month per smartphone user in 2024, a whopping 3X increase as compared to 2019, he said.

Also, India’s PLI scheme for Telecom and Networking products has been a roaring success, with total sales reaching ₹65,320 crore (19 per cent attributed to exports) in November 2024.

“In 2025, India is poised to become a global hub for telecom equipment manufacturing, with contribution of exports increasing significantly…the much-anticipated satellite spectrum allocation is expected to be completed in 2025. This would extend the broadband highway to the skies and usher in innovative service offerings (like in-flight connectivity),” Singhal added.

But, despite the promising advancements, the telecom industry faces several critical challenges, which disrupt the sustainable growth of the ecosystem, said S P Kochhar, Director General Cellular Operators Association of India (COAI).

TugFor instance, OTT regulation, fair share contribution from large traffic generators (LTGs), allocation of 6 GHz spectrum band, right of way (RoW) are yet to take place. Telecom equipment theft is also one of the major issues that the TSPs face, he said. “Although the Telecom Act has been enacted and the rules have been pronounced, the adaptation of these rules by all concerned is a little slow,” Kochhar added.