In Short:
The Indian telecom industry’s revenue has increased by Rs 1 lakh crore since 2018-19 due to government reforms. Average revenue per user has increased to Rs 150-200, with expectations to reach Rs 300. The industry achieved Rs 3 lakh crore in gross revenues last year, thanks to reforms in October 2021. However, there has been slow uptake of 5G technology in retail and enterprise sectors, with a need for more assistance from telcos in setting up networks.
Indian Telecom Industry Revenue Surges by Rs 1 Lakh Crore
The gross revenue of the Indian telecom industry has witnessed a significant increase of Rs 1 lakh crore between 2018-19 and 2022-23, attributed to the government’s sector reforms. This information was shared by Manish Sinha, Member (Finance) of the Department of Telecommunications (DoT).
Revenue Growth and Future Projections
Sinha highlighted the growth in Average Revenue Per User (ARPU) from around Rs 100 in 2018-19 to Rs 150-plus currently. He mentioned that some telecom operators are even reaching ARPU levels of Rs 200 and aiming for Rs 300. The gross revenue has seen a substantial increase of Rs 1 lakh crore since 2018-19, with potential income growth projected between Rs 50,000 crore to Rs 1 lakh crore in the coming years.
Speaking at the ETTelecom 5G|6G Congress 2024, Sinha noted that the industry achieved a milestone of Rs 3 lakh crore in gross revenues last year, attributing it to the reforms implemented in October 2021.
Impact of Reforms
Sinha emphasized that the sector reforms led to the resolution of various issues related to taxation policies, resulting in a significant reduction in spectrum usage charges for telecom operators. The reforms also freed up funds for further investment and capital expenditure in 5G technology. Additionally, reductions were observed in license fees, ensuring more capital expenditure availability for telcos over the past two years.
Notably, telecom companies annually pay 8% of Adjusted Gross Revenue (AGR) as license fees, while the Spectrum Usage Charge (SUC) payout is below 1% of AGR post the government’s decision not to apply SUC on airwaves acquired from the latest 5G auction onwards.
Challenges in 5G Adoption
Despite the revenue growth, Sinha highlighted that the adoption of fifth-generation technology in retail and enterprise segments has not met expectations. He pointed out the slow uptake of Captive Non-Public Networks (CNPN) by telecom operators and emphasized the need for specific interventions to assist in setting up these networks.
