The year 2025 was marked by both consumption- and investment-led growth in the telecom domain. Continued broadband expansion, rapid 5G roll-outs and implementation of the Telecommunications Act, 2023 were some of the key themes defining the sector. Industry analysts share their perspectives on the sector’s performance in 2025, the standout achievements, primary challenges and growth areas that need to be prioritised for the future…
How did the telecom sector perform in 2025? What were the standout achievements and primary challenges, particularly regarding 5G-Advanced adoption and the operationalisation of the Telecommunications Act, 2023?
Vinish Bawa
The year 2025 was a year of transition from growth to delivery, from coverage to usage, and from technology vision to economic reality. The industry is now faced with the more difficult question of how to achieve sustainable outcomes from world-class
digital infrastructure.
While the Telecommunications Act, 2023 has brought greater clarity on the policy front, the pain points are now in the implementation, especially at the state level. However, 5G-Advanced, artificial intelligence (AI)-native networking and the initial shape of the Bharat 6G Mission are also driving a change in the investment agendas of telcos, making them rethink their capital allocation, operating models and monetisation strategies.
The next chapter of the Indian telecom saga will not be about the speed of expansion but about the discipline of execution, coordination and the ability to strike the right balance between ambition and affordability.
Swapnil Srivastava
FY 2025 remained a scale-up year. The Economic Survey 2025-26 identifies growth as consumption- and investment-led, with the FY 2026 real GDP at 7.4 per cent and that of FY 2027 at 6.8-7.2 per cent, supporting sustained network demand and large-scale enterprise digital transformation. Budget policy continuity is evident in increased public capex (FY 2027 budget expenditure of Rs 12.2 trillion, approximately 3.1 per cent of GDP), crowding‑in digital infrastructure and logistics that underpin telecom traffic growth and edge workloads.
India’s telecom sector delivered broad-based growth through FY 2025, underpinned by one of the world’s fastest 5G roll-outs and sustained broadband expansion. The year saw near-ubiquitous 5G coverage momentum, with 5G available in 99.6 per cent of the districts by February 2025. This was supported by approximately 469,000 5G base stations and around 250 million users, a visible data centre and cloud push, and progress on the Telecommunications Act, 2023. The act was instrumental in shaping the operating environment via recommendations on service authorisations, spectrum sharing/leasing, terahertz usage, and network authorisations to simplify licensing and spur innovation. To complement this, the Department of Telecommunications (DoT) highlighted security (for example, Sanchar Saathi), indigenous research and development (R&D), and accelerated fibre/5G infrastructure deployment as key focus areas in 2025, reinforcing policy momentum.
Challenges persisted around returns on 5G capex and levy structures, and improving returns, with global telcos’ outlook emphasising cost control, disciplined capex, and new revenue paths as central themes heading into 2025-30. Union Budget 2026 did not explicitly cut the licence fee/spectrum usage charges, and industry’s levy
rationalisation call remains on the table.
Overall, 2025 was a transition year. Networks scaled rapidly but profitability still hinged on pricing discipline and enterprise monetisation to follow through in 2026. The macro and regulatory direction turned more supportive with execution shifts such as data centre incentives, component localisation, and standards reinforcing networks as national digital infrastructure.
Dr Mahesh Uppal
The sector saw notable progress in 2025, with significant improvements in broadband access and a successful 5G roll-out. India’s 4G stack was deployed on the Bharat Sanchar Nigam Limited (BSNL) network. There was decisive action to ensure the survival of Vi and, consequently, competition in India’s telecom sector.
However, most of the other changes on the policy front were less impressive. Practical 5G applications remain limited. The Telecommunications Act, 2023 has not led to visible results, despite the Telecom Regulatory Authority of India’s (TRAI) extensive consultations and recommendations.
With the industry’s focus shifting to returns on 5G capex, what is your 2026 outlook for ARPU growth? Do you anticipate further tariff hikes, or will growth be driven primarily by premiumisation and 5G-Advanced services?
Vinish Bawa
In 2026, ARPU growth will be less determined by pricing action and more by the discipline of monetisation. The industry has already tested the affordability levels of rates, with competitive dynamics leaving little room for headline price resets. Any price movement, therefore, is likely to be surgical, based on cohorts, and critically linked to usage or service differentiation.
The more sustainable lever will be premiumisation. This means pushing users up the value ladder, mainstreaming quality in terms of differentiated plans and driving growth in fixed wireless access (FWA)-led broadband penetration. 5G-Advanced will support this indirectly through improved experience consistency and network efficiency, but it should not be confused as being solely an ARPU catalyst.
The most significant change is behavioural. Operators are shifting direction from chasing headline ARPUs towards maximising lifetime value, reducing churn and increasing revenue predictability. As a result, ARPU growth in 2026 will likely be stable but modest and, more importantly, achieved with lower incremental
capital investments.
Swapnil Srivastava
The budget and the Economic Survey signal a steady increase in ARPU for 2026. The industry expects ARPUs to rise towards Rs 225-Rs 230 in FY 2026, driven by the mid-2024 tariff increases and deeper 5G usage, which is consistent with early projections of an approximately 25 per cent uplift versus FY 2024. Operators will continue to premiumise through differentiated 5G plans, speed tiers and content bundles. However, they will go with mix-driven premiumisation rather than a blunt price hike. Macro conditions (FY 2027 GDP 6.8-7.2 per cent) and capex-led infrastructure spending will sustain demand for higher-tier plans and convergence bundles. The budget’s AI/data centre tax holiday till 2047 and a deeper electronics/semicon push will strengthen the ecosystem for rich media, cloud-first and enterprise 5G experiences that will support tier migration without excessive churn risks. It is anticipated that the year 2026 would favour premiumisation first, with targeted tariff moves calibrated to maintain momentum without triggering a churn. Realistically, expect selective plan resets and content/speed-tiered 5G (5G-Advanced pilots) complemented by family/FTTx/ FWA bundling, and small and medium enterprise (SME) offers to raise blended ARPUs through mix upgrades.
Dr Mahesh Uppal
Operators are likely to push for higher tariffs to secure returns on their 5G investments. With only two major players dominating the market, raising prices became easier. However, as Vodafone Idea and BSNL demonstrate improved prospects, any tariff increases are expected to be gradual and limited. Since enterprises and specialised users can now leverage the advanced capabilities of 5G, such as low latency and internet of things (IoT), the majority of revenue growth, particularly related to 5G, will likely come from premium customers rather than general internet users.
Beyond traditional mobile data, which segments (such as FWA, private 5G or cloud-edge services) do you expect to emerge as the strongest revenue drivers for telcos in 2026?
Vinish Bawa
FWA could emerge as the biggest incremental revenue driver in 2026. It promises the cleanest pathway to monetise existing 5G investments, enables quicker payback to investment cycles and provides a credible choice over fibre in the underpenetrated and semi-urban markets. For most operators, FWA is not so much about disruption, but about better capital productivity.
Private 5G will retain its strategic importance, but its economic impact might still be narrow. Adoption will be focused on large enterprises with identifiable operational use cases, and scale of revenue will be restricted due to extended sales cycles, integration challenges and lack of ecosystem readiness. It will have a greater impact on enterprise positioning than on topline growth in the near term.
Cloud edge services will continue to be at an early stage from a revenue point of view. The value for them is in rooting long-term enterprise relationships and creating optionality for the future rather than immediate growth. In 2026, these segments will define strategy far ahead of time before materially affecting financials.
Swapnil Srivastava
Beyond traditional mobility, FWA is poised to be the near-term growth engine as operators leverage 5G capacity to accelerate home/SME broadband in underserved and semi-urban markets – shortening the time-to-revenue versus fibre. The budget’s physical infrastructure thrust reinforces rapid home/SME broadband expansion.
In the enterprise sector, private 5G + edge/cloud should grow steadily, with telcos moving from connectivity towards managed services, security and IoT/industry platforms to capture higher-value B2B spend. With the data centre tax holiday and safe harbour clarity reducing the total cost of hosting and stimulating low-latency use cases (video analytics, IoT, campus networks), the managed services and security stack for telcos will expand.
The budget’s Semiconductor Mission 2.0 and the Rs 400 billion Electronics Components Manufacturing Scheme (ECMS) will deepen the domestic hardware base (CPE, optical, devices), shortening supply chains and improving the time-to-revenue for enterprise offers.
Dr Mahesh Uppal
Private 5G is expected to offer significant monetisation opportunities for enterprises with well-defined use cases. Additionally, cloud edge services are likely to become increasingly profitable as AI and IoT continue to advance.
As the Bharat 6G Mission gathers pace, how significantly will AI-native networking impact telcos’ operational expenditure this year? Are you seeing a tangible shift towards autonomous network management?
Vinish Bawa
AI is beginning to bring in tangible benefits regarding opex, but the effect in 2026 will be incremental rather than transformational. The most obvious gains are in predictive maintenance, fault management, energy optimisation and network planning, which are directly relevant to the increasing cost pressures.
Operators are increasingly adopting AI to minimise manual intervention, shorten resolution cycles and maximise asset utilisation. Energy optimisation at the radio layer is proving to be one of the few areas where AI brings hard data for immediate and repeatable cost savings.
However, completely autonomous networks are still distant. Most deployments still run in assisted or semi-automated modes with various constraints (legacy architectures, fragmented data environment, skills). The move towards autonomy is real and irreversible; however, it is unfolding as a multiyear execution programme rather than a sudden technology leap.
Swapnil Srivastava
In 2026, operators are pivoting from “Level 5 someday” rhetoric to measurable, purpose-built automation that reduces truck rolls, prevents outages, improves SLAs, and reduces power – placing value creation over maturity model scores. Budget 2026 explicitly tilts the cost curve. A long-dated tax exemption (until 2047) for foreign cloud services using Indian data centres plus safe harbour guidance anchors capacity where traffic originates, enabling telcos to lean into AI-native assurance, predictive maintenance and self-optimising networks with lower unit opex. The Economic Survey adds a calibrated AI road map – prioritising application-specific, resource-efficient models and shared compute/data – which fits telco priorities (intent-based ops, anomaly detection) without over-engineering.
We do see a tangible shift towards autonomous network management in 2026, especially in assurance, optimisation and energy management, yet most operators will advance into high-impact domains first rather than achieving full end-to-end autonomy immediately.
Dr Mahesh Uppal
So far, I have not come across any reliable evidence of significant progress towards autonomous network management. While it is reasonable to anticipate that AI-driven networking will improve telecommunications efficiency in the coming years, there is still much work to be done on the path to 6G.
Looking towards 2027 and the Bharat 6G Mission, how will the telco business model evolve? What are the biggest structural risks, whether geopolitical or technological, that could disrupt this long-term digital road map?
Vinish Bawa
By 2027, the telco business model is likely to see a move towards the disintegration of the vertical value chain. Networks will become more of shared and programmable infrastructure, with value creation shifting to service layers, enterprise solutions and ecosystem partnerships. Consumer mobility will stabilise as a cash generation engine more than a primary growth-driving factor.
This evolution will require greater discipline in capital allocation and separation between asset owners, service innovators and platform plays. Operators that do not make this distinction may be exposed to structural inefficiency and watered-down returns.
Technologically, the greater risk lies in overprediction of near-term 6G monetisation and underinvesting in fundamentals such as security, interoperability and skills. The success of the Bharat 6G Mission will depend more on execution realism than ambition, policy consistency and ecosystem coordination.
Swapnil Srivastava
The Bharat 6G Mission continues to mature. Government-backed THz/optical test beds, 100+ funded projects, and 5G labs create the R&D spine. Budget 2026 extends the industrial base via ISM 2.0 (equipment, materials, full-stack IP) and ECMS scale-up, positioning telcos for API-led NaaS, slicing with SLAs, and sovereign AI-ready services by 2027. The biggest structural risks are geopolitical and technological like intensifying competition over 6G IPR and supply chains, evolving export controls, and heightened security and sustainability expectations, coupled with the industry’s need to demonstrate returns on investment on massive next-gen capex as standards harden (first specs expected by 2028, commercialisation around 2030).
Success in 2027 will hinge on standards influence via the Bharat 6G Alliance, domestic R&D/IP, prioritisation of AI-native, energy-efficient designs, and credible monetisation models that convert 5G/5G-Advanced learnings into API-led, enterprise-grade services while maintaining cyber resilience and cost discipline.
Dr Mahesh Uppal
Significant changes in the telecommunications sector are unlikely within a one-year period. Nevertheless, the advent of 6G is poised to substantially influence data consumption patterns and introduce new challenges for the sustainability of network infrastructure. It is important to acknowledge the structural risks involved. Discussions are ongoing and potential disagreements are anticipated regarding standards, strategic materials, energy use and carbon footprint considerations.
