The year 2023 was a significant one for Indian telecom operators. During the year, the top two Indian telcos, Reliance Jio and Bharti Airtel, positioned the country as a world leader in 5G roll-outs. Within a year of network launch, 5G coverage now spans 738 districts with over 400,000 base transceiver station deployments, an achievement lauded by many global industry organisations. While Jio deployed over 115,000 5G sites and nearly 690,000 5G cells across India, Airtel’s 5G Plus network is live in 3,000 cities and towns.
A key development on the policy front was the launch of the Indian Telecommunications Act, 2023, signalling a positive shift in the government’s efforts to enhance regulatory efficiency and modernise the Indian telecom landscape. This reform was long overdue. It replaces some of the old acts, such as the Indian Telegraph Act (1885), the Wireless Telegraphy Act (1933) and the Telegraph Wires (Unlawful Possession) Act (1950). The new act recognises telecom as critical infrastructure and imposes penalties on those inflicting any damage on it.
For telcos, in particular, the act is expected to bring much-needed predictability in critical areas related to spectrum such as harmonisation, surrender of unused spectrum, and primary and secondary assignments. This will lead to the creation of a robust digital infrastructure and increase service penetration. The act addresses another long-standing issue of legal backing for right of way, which will help accelerate 5G roll-outs in the country. Further, it replaces the Universal Service Obligation Fund with the Digital Bharat Nidhi initiative, a forward-looking approach that broadens the scope for research and development, particularly in terms of emerging technologies such as 6G and edge cloud.
Among telcos, the state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) finally signed an MoU to leverage operational synergies. As per a regulatory filing, BSNL took over mobile service operations from MTNL.
Further, Reliance Jio consolidated its market leadership in the wireline space in November 2023 and added 0.12 million wireline users, as per the Telecom Regulatory Authority of India data, increasing its user base to 10.8 million. Erstwhile market leader in the wireline segment, BSNL lost 0.034 million users. In the wireless segment, Reliance Jio and Bharti Airtel gained 3.45 million and 3.98 million users respectively in November 2023, whereas Vodafone Idea Limited (Vi) added 0.96 million mobile users even though it continued to lose its overall wireless subscribers.
In terms of customer market share, Jio and Airtel increased their shares to 39.49 per cent (from 39.3 per cent in October 2023) and 32.91 per cent (from 32.85 per cent in October 2023) respectively. Meanwhile, Vi’s share reduced further to 19.44 per cent against 19.59 per cent in the previous month.
As we enter 2024, 5G expansion seems to be a priority for all telcos. While Airtel and Jio are expected to strengthen their foothold in this domain, Vi and BSNL, which are currently lagging behind, are expected to catch up too. Overall, the concerns about a duopoly do loom over the Indian telecom space, unless a strong third operator in the form of Vi or BSNL emerges to stimulate competition and promote healthy growth.
A look at the performance of telecom operators in 2023, and the key initiatives taken by them during the year…
Reliance Jio 
The year 2023 was one of monumental growth and expansion for Reliance Jio. The operator marked a remarkable achievement by rolling out 5G services at a record pace. It completed its minimum 5G roll-out obligations in all the 22 licensed service areas, across each of the spectrum bands, ahead of the time stipulated for airwaves allocated during the 5G spectrum auction held in 2022. As of August 2023, the operator’s 5G network covered more than 96 per cent of the census towns in India, marking the fastest-ever 5G roll-out of this scale globally.
In terms of infrastructure, Jio deployed over 1 million 5G cells pan-India, with coverage across nearly 8,000 cities/towns. As of October 2023, it had contributed to 85 per cent of the overall 5G capacity in the country, powered by a 100 per cent in-house 5G stack, designed, developed and manufactured entirely indigenously.
Jio also completed the first-ever commercial-scale frequency range 2 (FR2) SA millimetre wave (mmWave) roll-out globally. The technology, developed using Jio’s in-house stack, extends the benefits of low latency and high throughput to the mmWave band through 5G SA core. In addition, the company launched the Jio True5G Developer Platform, a comprehensive platform combining its 5G network, edge computing and a variety of applications and services. It also inaugurated the Jio True5G Lab, a facility designed to accelerate industry transformation using Jio True5G.
The telco introduced several offerings in addition to its pure-play 5G services. Key among these was its fixed wireless access (FWA) solution, JioAirFiber. The service was initially launched across eight metropolitan cities – Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. Jio’s existing optical fibre network stretches over 1.5 million km and connects around 15,000 homes daily. With AirFiber, the telco aims to increase this number to 150,000 homes every day.
To promote digital inclusion in India, the telco launched the JioBharat 4G phone, priced at Rs 999, to drive the transition towards a “2G-mukt” India. The first beta trial of the phone began in July 2023 across 6,500 tehsils. Within the first few months of the launch, it gained a substantial market share in the non-smartphone segment.
In the emerging technologies space, Jio Platforms collaborated with NVIDIA to build state-of-the-art cloud-based AI infrastructure in India. As per the company, this infrastructure would enable accelerated computing and high speed secure cloud networking to run workloads safely and with extreme energy efficiency. It also partnered with Plume to provide smart home and small business services to its subscribers across the country.
The operator also made significant strides in the growing satellite communications space. The telco’s satcom arm, Jio Satellite Communications Limited, secured a pan-India internet service provider licence to provide broadband services to end Consumers via satellite. It also demonstrated India’s first satellite-based gigabit broadband, connecting the remotest corners of the country.
Another notable achievement was its entry into the evolving data centre market with the completion of the three-way joint venture (JV) between Brookfield Infrastructure, Reliance Industries Limited and Digital Realty. The JV was rebranded as “Digital Connexion: A Brookfield, Reliance Jio and Digital Realty company”, with each owning a 33.33 stake in the unit.
In the 6G realm, Jio became among the first global operators to develop 6G capabilities. It has become one of the largest filers of global patents from India for digital technologies, signalling its transformation from a telecom operator to a technology company.
On the financial front, Jio continued its healthy growth path throughout the year. The company reported a consolidated net profit of Rs 52.08 billion during the quarter ended December 2023, up from Rs 46.38 billion in the same quarter last year. Its revenue from operations rose by around 10 per cent year on year to Rs 253.68 billion during the quarter ended December 2023.
Moving into 2024, Jio has identified four frontiers for future growth – the consumer segment, powered by Jio 5G and Jio Bharat; the home segment, driven by Jio AirFiber; the business segment, with a large untapped potential; and Jio Platforms, which offers an opportunity for global expansion. In addition, the company is looking to rapidly integrate the latest global innovations in AI, particularly the recent advances in generative AI. Notably, it is working with IIT Bombay to launch BharatGPT, a large language model specifically designed for Indian requirements. The coming year may witness Jio expanding its global footprint, as indicated by its latest bid for stakes in SLTMobitel, Sri Lanka’s national telecom service provider. Jio also plans to transition most of its energy consumption in connectivity and digital services to green energy over the next five years.
Bharti Airtel
Bharti Airtel began the year with the widespread deployment of 5G services across the country. Within a year of the 2022 spectrum auction, the operator completed the minimum roll-out obligation of introducing 5G services on the 26 GHz spectrum in all 22 telecom circles of India. Airtel rolled out its 5G services in non-standalone mode across all districts of the country by the end of October 2023. In addition, it provided 5G services for the Kochi Water Metro, India’s first water metro service.
Airtel also launched its 5G FWA service, Airtel Xstream AirFiber, the country’s first 5G Wi-Fi solution that offers internet in fibre-dark areas. Further, the operator carried out the first implementation and validation of reduced capability (RedCap) in India with the testing of Ericsson’s pre-commercial RedCap software on its 5G network.
To bridge the digital divide, Airtel collaborated with Alphabet Inc. to deliver the new laser-based high speed internet technology in remote villages in India. Leveraging Alphabet’s machines, which provide fibre optic internet using laser beams, the operator aims to build communications infrastructure in hard-to-reach places.
To undertake network upgradation, the telco partnered with Ribbon Communications Inc. for its long-haul dense wavelength, division multiplexing network expansion; Nokia for deploying a next-generation optical transport network in its national long distance network; and Mavenir to deploy open radio access network technology in the low-revenue generating rural parts of India.
Financially, Airtel remained strong. The company’s consolidated revenue during the quarter ended December 2023 stood at Rs 379 billion, a year-on-year growth of 5.9 per cent. With regard to its India business, the telco’s revenues for the reported quarter stood at Rs 278.11 billion, a year-on-year increase of 11.4 per cent.
Airtel expanded its data centre footprint, with its data centre arm Nxtra now operating 12 data centres and 120 edge data centres across the country. As part of its commitment to reducing its the carbon footprint, the company announced the acquisition of stakes in renewable energy project companies established by Continuum Green India and Vibrant Energy Holdings to power six of Nxtra’s edge data centre facilities.
The company strengthened its position in the space domain as well. Its subsidiary OneWeb completed an all-share combination with Eutelsat Communications, forming the first fully integrated geosynchronous equatorial orbit-low earth orbit satellite operator with Bharti Enterprises as its largest shareholder. The entity received necessary authorisations from the Indian National Space Promotion and Authorisation Centre to launch its commercial satellite broadband services in India, becoming the first organisation to be granted this authorisation.
Airtel’s B2B division was also abuzz with activity. It became the first ICT service provider in the country to connect over 20 million devices through its internet of things (IoT) solutions. The key partnerships for Airtel IoT deployment were with Secure Meters for the deployment of 1.3 million smart meters in Bihar on narrowband IoT, IntelliSmart Infrastructure Private Limited for powering up to 20 million smart meters pan-India, and Matter Motor Works to power 300,000 bikes through cellular IoT. Furthermore, Airtel Business launched “Airtel Advantage”, a first-of-its-kind unified automated platform offering global interconnect solutions. The telco also launched its contact centre-as-a-service solution, an industry-first omnichannel cloud platform that offers a unified experience for all contact centre solutions required by an enterprise.
Going forward, the 5G, data centres and satellite communication domains are likely to be the key focus areas for Airtel. The company aims to continue with its strategy of premiumisation of customers. In terms of upcoming spectrum auctions, Airtel aims to focus on reducing its expenditure. It will not buy 700 MHz spectrum and rather target smaller sizes in markets where its airwave holdings are expiring in 2024. It will refarm its mid-band airwaves once 25-30 per cent of smart devices in circulation become 5G-enabled.
Vi
Vi continued to struggle financially during the past year while dealing with cash flow issues that hindered capital expenditure and vendor payments. The year started with the government approving the conversion of Vi’s dues linked to interest on spectrum and adjusted gross revenue, worth Rs 161.33 billion, into equity, with the government becoming the single largest shareholder in Vi. Soon after, the telco was in multiple discussions for securing funds from third-party sources, including banks, promoters and external investors.
On the financial front, the debt figures were unavoidable, with a debt liability of over Rs 2 trillion. Nonetheless, Vi started with a series of payments this year. It paid 50 per cent of the spectrum usage charge and licence fee dues for the fourth quarter of 2022-23 in September 2023. In another move, Vi paid Rs 17.01 billion to the government for dues related to 5G and other spectrum acquired previously.
Vi also issued 12,000 unsecured, unrated and unlisted optionally convertible debentures worth Rs 16 billion to the American Tower Corporation. Furthermore, Franklin Templeton Mutual Fund received Rs 13.98 billion from Vi in repayment for its investment in debt instruments. Following this, Indus Towers Limited also received monthly payments from Vi and planned to recover the telco’s past dues while monitoring its fundraising plans.
During the year, Vi proposed a significant equity infusion of Rs 140 billion as part of its business revival plan. In June 2023, the company secured a commitment of Rs 90 billion in fresh funding from the Aditya Birla Group and the UK’s Vodafone plc. Vi aimed to close its external equity funding in the third quarter of 2023-24, bringing it one step closer to its Rs 650 billion capex plan for the next four years. However, this did not materialise.
Vi reported a marginal reduction in net loss to Rs 69.86 billion in the quarter ended December 2023, as against Rs 79.9 billion in the previous quarter, supported by increased revenue and higher number of 4G subscribers.
Towards the end of the year, Vi was in advanced negotiations with private equity companies to monetise its fibre assets and in-building solutions to raise Rs 100 billion-Rs 120 billion. As per industry sources, the valuation of fibre assets was around Rs 100 billion Rs 115 billion while that of IBS was around Rs 5 billion.
Further, the telco made improvements with respect to network and infrastructure expansion. It deployed an additional 1800 MHz spectrum band on all 11,000 sites in Andhra Pradesh and Telangana. It rolled out voice over Wi-Fi calling services for customers in the Kerala and Karnataka circles.
Meanwhile, Vi Business launched “hybrid software defined wide areanetwork” (SD-WAN), which provides hybrid network architecture, integrated security and comprehensive monitoring and analytics capabilities with intelligent routing. Notably, Vi also became the first telecom company to showcase its anti-phishing solution to regulatory bodies. Moreover, Vi Business partnered with Yotta Infrastructure to improve its data centre colocation and cloud services portfolio.
On the 5G front, the telco successfully tested 5G services across both 25 GHz millimetre wave and 3.3 GHz mid-bands in Pune, aiming to meet the minimum roll-out obligations mandated by DoT. It was also in advanced talks with various network vendors for the finalisation of its 5G roll-out strategy and concluded device testing of all major original equipment manufacturers on its network.
The year also witnessed Vi entering several strategic partnerships. The telco awarded a network gear order worth Rs 20 billion to China-based ZTE as well as orders for broadband network equipment in the Gujarat, Maharashtra and Madhya Pradesh-Chhattisgarh circles. In addition, Vi partnered with Anritsu to enhance the end-to-end calling experience for VoLTE users in India. Vi partnered with the Centre for Development of Telematics (C-DOT) to offer a first-of-its-kind IoT lab, aimed at promoting standardisation and interoperability in the loT ecosystem. Route Mobile Limited also signed an agreement with Vi to deploy and implement its suite of end-to-end application-to-person (A2P) monetisation solutions, for all A2P SMS traffic on the Vi network. To offer connectivity support on smartphones, Vi partnered with handset players Motorola and Xiaomi India.
In 2024, Vi plans to begin offering 5G services within seven to eight months of securing funding. Since the delay in securing funding hampers Vi’s expansion plans, particularly in the 5G domain, it remains to be seen how these plans materialise in the current year.
BSNL and MTNL
The major highlight of the year for BSNL and MTNL was the signing of an MoU in August 2023, which laid the groundwork for operational synergies between the two companies. Further, the union cabinet approved a third revival package for BSNL with a total outlay of Rs 890.47 billion. It included an allotment of 4G/5G spectrum for BSNL through equity infusion and an increase in the company’s authorised capital from Rs 1.5 trillion to Rs 2.1 trillion. It also enabled the provision of FWA services for high speed internet.
BSNL remained active with respect to infrastructure expansion as well. The operator provided 3.29 million fibre-to-the-home (FTTH) connections to customers as of September 30, 2023. Meanwhile, the Himachal Pradesh government signed an MoU with the operator for laying optical fibre cable to provide 4G coverage in unconnected and remote areas of the state – Kinnaur, Lahual, Spiti and Pangi. Furthermore, as part of pilot testing, the telco deployed 200 4G sites in three districts of Punjab – Ferozepur, Pathankot and Amritsar – followed by the beta launch of its 4G services in Amritsar.
The telco also started live testing of its 4G services with 135 tower sites using an indigenous telecom stack. It launched its 4G services in the Jamshedpur business area, and high-speed FTTH internet service in Kaza, Himachal Pradesh. In addition, 625 mobile towers are planned for installation in Himachal Pradesh, providing mobile network services in approximately 2,700 villages with no existing network facilities.
In another move, the state cabinet of Goa decided to provide 2,000 square feet of space for each tower location, free of cost, on government land or land belonging to any government department or institution for BSNL. The telco also issued a purchase order for the construction of 100,000 4G sites to Tata Consultancy Services (TCS) and ITI Limited. Towards the end of the year,
C-DOT announced plans to deploy indigenously developed 5G telecom gear in BSNL’s network over the next six to eight months.
The operator also entered into major strategic partnerships and signed several agreements. It partnered with Larsen & Toubro Technology Services to deploy private 5G networks for enterprises in India. Further, BSNL tied up with Amantya Technologies, Echelon Edge and Telecommunications Consultants India Limited to set up private 5G networks for enterprises. Further, TCS granted Tejas Networks Limited a mobilisation advance of Rs 7.5 billion (about $900 million) for the delivery of radio access network equipment for BSNL’s pan-India 4G and 5G networks. In addition, Tejas secured a deal worth Rs 6.96 billion from BSNL for a pan-India router network.
Furthermore, the telco signed an MoU with Electronics Corporation of India Limited to collaborate on SD-WAN, cybersecurity, smart meters, surveillance systems, and electronic supervisory control and data acquisition.
In terms of financial performance, BSNL reported a widening of its net losses to Rs 14.82 billion in the quarter ended September 2023, which was a slight increase from the previous quarter’s net loss of Rs 14.7 billion. The higher sequential loss during the quarter was primarily due to an increase in expenses on advertisement, business promotion and marketing, interconnect usage charges to other operators, higher revenue shares to business partners, bad debt write-offs and expenses on construction contracts, among others.
Furthermore, on a consolidated basis, MTNL reported a total income and profit of Rs 3.71 billion and Rs 7.92 billion respectively for the quarter ended September 2023.
BSNL appears to have started the year 2024 on a promising note as it is set to soon launch its 4G services in the Uttar Pradesh East circle. The telco plans to launch its 4G services in Andhra Pradesh, Telangana and Tamil Nadu, among other southern states, and further across the country in 2024. With other telcos focused on accelerating 5G roll-outs, BSNL still has a lot of catching up to do to remain competitive in the Indian telecom space.
