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Telecom sector in India

Today we are going to talk about India’s telecom sector. What is going on in India’s telecom sector and what are the two major changes in it? Because of which the telecom sector has changed completely. Currently, India is known as the cheapest data market in the world. All this has been possible after the arrival of Reliance Jio in India.

However, two big companies in India’s telecom sector Airtel and Vodafone Idea are struggling due to huge losses and now it has become even more difficult for them to survive in the market. Reliance Jio has emerged as the largest player in India’s telecom market amid heavy competition. However, now both Airtel and Vodafone Idea are seen competing with Reliance Jio.

Overview of India telecom market

If we talk about the overview of India’s telecom market, India is the second largest telecom market in the world. It has a subscriber base of 1.16 billion. It has seen a lot of growth in the last 10 years.

In the Indian telecom market, if we talk about internet subscribers, then it is the second largest market in the world. And the number of these subscribers is constantly increasing. Increasing smartphone penetration in India and decreasing data prices will add 500 million new users to the Indian telecom market in the coming 5 years. That is, there is still a lot of growth in the Indian telecom market. New business opportunities are also going to increase due to which India’s unemployment can also be reduced somewhat.

If we talk about the third quarter of the financial year 2021, then the gross revenue of the telecom market was 68281 crores. We can divide India’s telecom sector into two parts. The first are companies that manufacture equipment for the telecom sector. These companies provide infrastructure to the telecom sector in India. Through which our internet traffic runs. Which includes 2G 3G 4G 5G and broadband internet. This includes submarine cable wire towers and another type of telecom infrastructure. Indus towers are named prominently in these types of companies.

On the other hand, if we talk about market capitalization, the market capitalization of Airtel is Rs 288567 crore. The market capitalization of Vodafone Idea is currently Rs 24568 crore. Talking about Reliance Jio, the country’s largest telecom company, its IPO has not yet been launched in the market. And it is a subsidiary company of Reliance Industries itself. However, news is coming in the market that Reliance Jio may have an IPO in the market soon.

Reliance Jio is preparing to lay the world’s largest international submarine cable network. This submarine cable will connect India with Singapore and European market. Apart from this, Reliance Jio also wants to reach the US by submarine cable. With this, Reliance Jio will be able to compete with the big players coming in the market such as Starlink and OneWeb. Through this network, users of Reliance Jio will get 200 Tbps speed. This will help Reliance Jio roll out the 5G network in India as well.

At the same time, other types of companies in the telecom market of India are telecom service providers. Which are very popular in themselves. Which includes Reliance Jio Bharti Airtel Vodafone Idea and government company BSNL.

Today we are going to talk. India’s top 3 telecom providers include Bharti Airtel Vodafone Idea Reliance Jio. We will talk about how the telecom sector in India has changed. What is the future of this in future?


First of all, we will talk about the country’s largest telecom company Reliance Jio. When Reliance Jio was launched in 2016, India’s telecom market changed completely. When Reliance Jio was launched in the Indian telecom market, its owner Mukesh Ambani said that Internet voice calls will remain free in India by the end of this year. Along with this, the apps provided by Reliance Jio like Jio Cinema Jio Music Jio TV will also be free. This was later extended to March 2017.

Reliance Jio became the largest telecom player in the country in the next 3 years due to its cheap and good service. Reliance Jio significantly reduced data and calling prices in the country.

Reliance Jio promised that voice calls are being made free in India forever. However, due to IUC charges, Reliance Jio once again made voice calls to paid service. But now once again, Reliance Jio has made the voice call free. By mid-2019, Reliance Jio had more than 330 million subscribers.

The market share of Reliance which till now looked quite stable. After the launch of Reliance Jio, it saw a lot of bounce.

What was the impact of Reliance Jio in India’s telecom market? You can understand this from the fact that in the next 3 years, the demand for data in India has seen a jump of 4160%. During this period, the number of 2G and 3G customers steadily decreased. And at the same time customers who had hitherto depended only on voice calls. Their numbers also saw a steady decline. The same 4G customers saw a sudden jump in numbers.

Data consumption in India reached around 57% in 2,019-20. The number of voice calls has also seen a significant increase due to Reliance Jio making voice calls unlimited free for Indian customers. It also had an impact on the revenues of Indian telecom companies and saw a steep decline in fallow user revenue in India.

This was followed by a price war in the Indian telecom market. Due to which some companies could not survive in the market and the bank was corrupted. Which includes companies like Aircel, Reliance Communication. The same companies merged into each other. Vodafone Idea merged in one place. It was the largest merger ever in Indian telecom history. This was followed by the creation of a new company vodafone-idea Limited.

AGR dues

The incident which affected the Indian telecom market the most after Reliance Jio is the outstanding AGR. Now we will try to understand here, what is the case of YGR after all? Which affected the Indian telecom market badly.

Whenever the telecom companies make money, the Government of India demands a license fee from them. The telecom company makes a lot of money. Of which data charge is the main one. Apart from this, telecom companies also earn from renting out their infrastructure. Apart from this, there are many other ways through which Indian telecom companies make money.

Apart from data and voice calls, other earnings also show in the balance sheet of the telecom company. If the government says that we need a share from other earnings, then a contravention is created. To avoid this contraption, telecom companies calculate their revenue in adjusted gross revenue. Out of which the government gets its share in the form of tax.

But here also a contrast has been created. Telecom companies think that the government should be taxed only on the income from the companies’ telecom business. The telecom companies say that if we sell a tower or business or if we get any amount in the form of interest, then the government should not ask for its share. If the government does not do so, it will be unfired.

At the same time, the government argues that it should get tax from all types of revenue. Whether it involves the business of selling towers or any other coming to telecom companies. Which is not usually talked about. The government says that you get a telecom license. This is why you are able to make income. In such a situation, we have to pay tax on the income of all types of telecom companies.

When no decision was taken between the telecom companies and the government over this dispute, the telecom companies reached the Supreme Court. Subsequently, the Supreme Court ruled in favor of the government. And now we have told the telecom companies that the AGR is as much as the previous outstanding. Now the telecom companies should pay it to the government. At the same time, the telecom companies should also pay interest on it. This is a huge amount. Which now Airtel Vodafone Idea has to pay to the government.

In October 2019, the Supreme Court gave its decision in favor of the government and asked the telecom companies to pay the tax to the government by January 2020.

But by January 2020 deadline, telecom companies failed to pay their tax. Reliance Jio was the only such company. Which paid its entire AGR to the Central Government. It was about 195 crores rupees.

Subsequently, in March 2020, the Supreme Court said that the telecom companies can pay the tax in the government to the establishment. For this, the Supreme Court gave 10 years to the telecom companies. Of this, 10% of the money was to be paid by March 2021. And the rest of the money had to be paid for 10 years in small installments. The installment was annual.

Airtel had to pay 43980 crore rupees as AGR payment to the government. The same vodafone-idea was to pay 58254 crores rupees to the government as AGR payment. Which in itself is a huge amount.

This will severely affect the balance sheet of AGR outstanding telecom companies. For this, telecom companies will have to make a provision of excessive money in their balance sheets. Talking about Reliance Jio, it has repaid its entire AGR dues to the government. Reliance Jio got the benefit of being the new telecom company here.

Indian telecom market share

When it comes to market share in the Indian telecom sector, the largest company is Reliance Jio. This is followed by Bharti Airtel and then followed by Vodafone Idea’s number.

According to the total number of wireless subscribers, Reliance Jio has 35.4% subscribers in the telecom sector. Airtel has a market share of 29.83 such percentages. With this, Airtel is the second largest company in the Indian telecom sector. Vodafone-idea has a 24.20% stake.

Now if we talk about the average revenue per user of these three telecom companies here, from March 2020 to March 2021, Reliance Jio’s ARPU increased from ₹ 130 to ₹ 138. Airtel has seen the largest increase in revenue per user. From March 2020 to December 2020, Airtel’s revenue increased from ₹ 135 to ₹ 166. But then it saw a decline and by March 2021 Airtel’s revenue from each user was ₹ 145. On the other hand, if we talk about vodafone-idea then in March 2020 the revenue per user of vodafone-idea was ₹ 121. Which remained ₹ 121 in 2000 December 2020 as well. Subsequent financial results of vodafone-idea are not available.

As you can see that Airtel is increasing its market share with Reliance Jio. The number of customers of the same vodafone-idea kept steadily decreasing every month. However, the number of customers of vodafone-idea has been increasing in the past few months. Airtel is also increasing its market share within the telecom sector. At the same time, it is also getting the most revenue per user.

If we talk about broadband subscribers here now, Reliance Jio, Airtel and Vodafone Idea are the biggest players. Talking about Reliance Jio’s subscribers, Reliance Jio has 417.42 million subscribers. The same Airtel had 188.21 million broadband internet subscribers. If we talk about the broadband internet subscribers of Vodafone Idea then it has 1223.28 million subscribers.

Future of Indian telecom sector

Now here we talk about the future of the Indian telecom sector. Most people think that 5G network is sure to come in India. It may be launched next year. Or to be launched after 3 years. But the general opinion is that today if not 5G network will be launched in the Indian market tomorrow. But till then we will have to operate from 4G network only.

According to a parliamentary panel, the 4G network will dominate the Indian market for the next 5 years. One thing is clear from this that the Government of India and the telecom companies still need to do a lot of work to make 4G network available to all people.

The latest auction of 4G spectrum was conducted by the Government of India in March 2021. Reliance Jio bought the most spectrum in this auction. Reliance Jio invested around Rs 57,100 crore in this spectrum auction. Airtel, the second-ranked Airtel, spent Rs 18700 crore to buy 4G spectrum. But the biggest concern is about vodafone-idea. Who bid only Rs 2000 crore for the spectrum auction.

If we talk about the auction of 5G spectrum in India, it will be in 2022.

Vikas Yadav
Vikas Yadavhttps://thesocialchat.in
Hii my name is Vikas Yadav and I am a content writer and content editor in the social chat. I have 5 year experience in content writing and editing. You can follow us for more trending stories from around the world.


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