The Indian telecom market has expanded rapidly in the past few years, driven by the increasing availability of affordable smartphones, low tariffs, government initiatives, digital applications and advancements in next-generation technologies. The number of telephone connections grew from 933 million in March 2014 to 1,188.7 million in October 2024, with overall teledensity reaching approximately 84.5 per cent. Internet connections also rose sharply from 251.5 million in March 2014 to 969.6 million in June 2024, reflecting a 285.53 per cent growth. Meanwhile, average monthly data consumption per wireless subscriber increased by 353 times, reaching 21.30 GB in June 2024, compared to just 61.66 MB in March 2014.
To support this surge in telecom services, both the government and industry have taken several steps to enhance network capacity and coverage and improve the quality of services. There has been a significant growth in the deployment of telecom towers, optical fibre cables (OFCs), base transceiver stations (BTSs) and small cells across the country. The country now has approximately 0.8 million telecom towers, 2.93 million BTSs and over 0.46 million 5G mobile BTSs. Fibre infrastructure has also advanced considerably, with over 3.72 million route km of OFC deployed. The pace of fibre deployment has accelerated significantly since the launch of 5G services, averaging around 0.1 million route km per month compared to about 0.017 million in the pre-5G years. Further, around 0.23 million public Wi-Fi hotspots have been deployed under the Prime Minister’s Wi-Fi Access Network Interface (PM-WANI) scheme. Additionally, the satellite communications sector has witnessed significant developments recently, with Reliance Jio Infocomm Limited and Bharti Airtel partnering with the US-based Starlink to deliver high-speed internet to rural and remote areas.
However, despite these advancements, telecom infrastructure remains grossly insufficient to meet the growing demand for seamless connectivity. Challenges such as securing right of way (RoW) permissions, particularly in urban areas, continue to delay the deployment of telecom towers and OFCs, despite efforts to standardise charges and streamline approvals. The high capital expenditure required for infrastructure expansion also remains a major hurdle, along with spectrum acquisition and 5G roll-out costs. Moreover, there remains a significant rural-urban divide in telecom services, with rural teledensity at around 58.5 per cent, significantly lagging behind urban teledensity, which stands at around 132 per cent.
Policy impetus accelerates growth but leaves room for improvement
The Indian government has launched several initiatives to accelerate digital infrastructure deployment across the country. A key move was the launch of the GatiShakti Sanchar Portal in 2022, aimed at centralising and streamlining RoW approvals. By integrating stakeholders across central and state governments, local bodies and service providers, the portal has reduced bureaucratic delays and minimised paperwork. As a result, the average application disposal time has dropped from 448 days in 2019 to 60 days in 2024, with 20 per cent of applications resolved within 15 days.
Moreover, in September 2024, the Department of Telecommunications released the new RoW rules to further facilitate the installation of telecom infrastructure. The new rules revised the definition of a “mobile tower” to include relocatable structures while excluding poles. They also eliminated the need for property owners’ permission to establish mobile towers or poles on private properties, allowing infrastructure companies to apply through an online portal if disputes arise. Additionally, the rules prescribe that RoW approvals must now be granted within 67 days, with automatic clearance in case of delays. Small cell installation charges have been capped at Rs 300 in urban areas and Rs 250 in rural areas per street furniture to promote cost-effective expansion.
Bridging the rural-urban digital divide through infrastructure expansion
To bridge the digital divide between the rural and urban areas, the government is making concerted efforts to expand digital infrastructure in rural areas, primarily through initiatives under the Digital Bharat Nidhi, previously known as the Universal Service Obligation Fund.
A key component of this effort is BharatNet, which aims to provide broadband access to all gram panchayats (GPs) and villages. The first phase, covering over 100,000 GPs, was completed in 2017, while the remaining areas are being connected through state-led, CPSU-led and private sector-led models. As of December 2024, 692,428 km of OFC has been laid, bringing broadband services to 209,281 GPs, with an additional 5,032 connected via satellite. Further, BharatNet has enabled nearly 1.2 million fibre-to-the-home (FTTH) connections, with data usage at 139,498 TB as of October 2024.
The north-eastern states have also witnessed significant infrastructure expansion. A total of 1,358 sites have been installed to provide services in the uncovered villages and along national highways in Assam, Manipur, Mizoram, Nagaland, Tripura, Sikkim and Arunachal Pradesh. While the original plan was to provide 2G services in these areas, operators have voluntarily deployed 4G at nearly 90 per cent of these locations.
Infrastructure roll-out in the Andaman & Nicobar and Lakshadweep Islands has also gained momentum. The Chennai-Andaman & Nicobar Islands submarine cable is fully operational, with a bandwidth capacity of 205 Gbps. Satellite bandwidth has also been upgraded from 2 Gbps to 4 Gbps. Meanwhile, for Lakshadweep, the Kochi-Lakshadweep Islands submarine cable project, commissioned in early 2024, is facilitating the roll-out of 5G and FTTH services.
The government is also focusing on connectivity in the border and Left-Wing Extremism areas. Of the 354 villages targeted under the border villages scheme, 319 now have 4G mobile services. Further, the government is focusing on improving connectivity in the most backward districts of the country under the Aspirational Districts Scheme. As part of this, a project has been awarded for the provisioning of 4G-based mobile services in 502 villages across 112 aspirational districts of Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan. The project is currently under implementation.
Moreover, to ensure full 4G coverage, the government has launched a nationwide project worth Rs 263.16 billion to connect 24,680 previously uncovered villages, upgrade 6,279 existing 2G/3G sites and survey 63,000 locations. As of December 2024, 7,332 sites have been commissioned, covering 9,366 villages.
Opportunities for industry stakeholders
With telecom emerging as the backbone of India’s digital economy, industry stakeholders, including telecom operators, infrastructure providers, technology companies and investors, can leverage the opportunities arising from rapid expansion and modernisation. Telecom operators, driven by the roll-out of 5G services and India’s ambition to take an early lead in 6G, can enhance their service offerings and tap into new revenue streams. They can achieve this by deploying small cells, expanding OFC networks to meet 5G’s high-speed, low-latency requirements, and forming partnerships with infrastructure providers and technology companies to reduce capital expenditure.
Meanwhile, tower companies stand to benefit from increased network densification, as small cells and fibre deployment become integral to next-generation networks. Equipment manufacturers and technology providers can capitalise on the rising demand for advanced telecom gear, including energy-efficient solutions and AI-driven network management tools. Investors, too, have the opportunity to enter a high-growth market, strengthened by government initiatives promoting infrastructure sharing and policy support, further enhancing the sector’s attractiveness.
Challenges and the way forward
Despite significant progress in expanding telecom infrastructure, several challenges continue to impede seamless growth. While the government has made efforts to streamline approval processes, obtaining RoW permissions, particularly in urban areas, continues to delay the timely deployment of telecom towers and OFCs. Financial constraints also pose a significant hurdle, with high spectrum acquisition costs, capital-intensive 5G roll-outs and the need for extensive OFC deployment straining telecom operators. Additionally, low tariffs and mounting debt are limiting telecom companies’ ability to invest in new infrastructure. Moreover, security concerns, including cyberthreats and data breaches amid the rapid expansion of next-generation technologies, have necessitated significant investment in advanced network protection, further increasing operational costs.
Meanwhile, in rural and remote areas, difficult terrain, low population density and limited commercial viability continue to make network expansion challenging. Power supply issues, particularly in remote locations, further complicate infrastructure expansion, often requiring expensive backup solutions like diesel generators. Additionally, a shortage of skilled professionals in these regions is affecting network deployment and maintenance.
Despite these challenges, the Indian telecom sector is poised for considerable growth in the coming years as the proliferation of next-generation technologies and bandwidth-intensive applications continues to drive demand for high-speed services. Further expansion, however, will require strengthening the infrastructure backbone, as the current network is inadequate for meeting future requirements. Going forward, streamlining regulatory processes, enhancing public-private collaboration and investing in critical projects like BharatNet for rural areas will be crucial to ensuring that India’s digital landscape remains expansive and inclusive.
