The Indian telecom industry, with one of the highest data traffic per connection in the world, offers immense growth potential. Average revenue per user (ARPU) remains low, leaving room for future growth. The sector’s revenue growth accelerated post-FY19, with a CAGR of 13 per cent (FY19-23), compared to just 1.4 per cent in FY13-19. Industry consolidation (the number of service providers fell from 10 in 2017 to just 4 in 2023) bodes well for future price growth.
The increasing availability of affordable smartphones, gradual reduction in data tariffs and increasing income levels have contributed to the growing penetration of smartphones and 4G in India.
The sector’s revenues witnessed a decline of 6% CAGR during fiscal years 2016 to 2019 due to increased competitiveness and pricing pressure. Since FY2019, revenue has grown steadily, with a CAGR of 13% over FY2019 to FY2023.
Data traffic per mobile connection in India is higher than that in China, although ARPU is less than a third. This disparity leaves room for future price growth that will benefit the industry.
The sector has gone from ten players in 2017 to just four in 2023. Jio and Bharti Airtel are leading the way with 40 percent and 33 percent market share, respectively.