According to industry estimates, as Reliance Jio and Bharti Airtel reportedly approach the final stages of their 5G network expansions, capital spending reduces and tower rentals decline,  tower companies are expected to experience stagnant growth over the next five years. Vodafone Idea Limited’s (Vi) ongoing 5G rollout and efforts to widen its 4G coverage may provide only limited short-term support.

New tower installations dropped to 25,000 in 2024-25, the lowest level since 2017-18 and are projected to fall even further in the current financial year (FY). This follows a slowdown in industry tower growth to 3.5 per cent in the previous fiscal year, after maintaining a strong annual growth rate of 8.1 per cent since 2016-17.

Similarly, additions of 5G base transceiver stations (BTS), which form a major component of network capital expenditure, fell sharply to 8,000 in the third year of 5G deployment, down from 141,000 in FY23. This points to a clear reduction in 5G-related investments, even though 5G BTS account for only 15.8 per cent of the total. In comparison, 4G BTS additions had already started to decline after about seven to eight years of continuous rollouts.

Out of India’s nearly 800,000 telecom towers, the second highest globally after China, approximately 275,000 are managed by Brookfield backed Altius Telecom Infrastructure Trust (formerly known as Data Infrastructure Trust), with Jio as its largest tenant. Around 250,000 towers are run by Indus Towers, which is majority owned by Airtel. Other notable tower firms include GTL infrastructure with 26,000 towers, and Ascend Telecom with roughly 18,600.

Additionally, India’s telecom capital expenditure has seen a considerable drop since 2022-23, when 5G rollouts began. Jio led the charge with aggressive spending in the first two years, while Airtel took a phased approach over four years. Meanwhile, Vi, which is just starting to expand its 5G network, is not expected to significantly impact tower growth.

Further, according to India Ratings, a weak outlook for tower firms is expected this fiscal, due to declining tenancies and stagnant margins. Data shows that tower rental rates fell steeply from Rs 85,000 per tower per month in 2021-22 to Rs 69,000 in 2024-25.

Furthermore, industry capital expenditure peaked in 2023-24 at Rs 773.65 billion, of which nearly 80 per cent, about Rs 528.61 billion was allocated to 5G investments. However, this figure dropped to Rs 693.42 billion in 2024-25, with Rs 427.97 billion directed toward 5G.