India’s telecom industry, once a showcase of market dynamism, now finds itself constrained by concentration and the erosion of competitive energy. Two private giants — Reliance Jio and Bharti Airtel — have established near-total dominance, together controlling almost three quarters of the mobile market. What was once a vibrant and competitive industry has quietly turned into a duopoly. This concentration of power has started showing predictable symptoms: higher tariffs, fewer low-cost data plans, and limited consumer choice.
The Supreme Court’s recent direction allowing the Union government to reconsider Vodafone Idea’s (Vi) plea on Adjusted Gross Revenue (AGR) liabilities has opened a small but significant policy window. The market’s reaction was telling — Vi’s shares surged by nearly 10 per cent on October 27, signalling renewed investor confidence. But more than a stock movement, it was a reminder that India’s digital future depends on restoring genuine competition in telecom.
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Duopoly in India’s telecom market
The data speaks for itself. Jio and Airtel together command about 75 per cent of India’s wireless market, leaving Vodafone Idea with most of the rest and BSNL at the margins. Industry observers have long warned that this imbalance hurts consumers and stifles innovation. As competition thins, companies tend to act in lockstep on pricing. In recent months, both Jio and Airtel have quietly eliminated entry level data packs and raised minimum monthly tariffs. This is not coincidence — it is classic duopolistic behaviour in a market where challengers have faded.
A healthy telecom market needs at least four strong operators to keep prices competitive and services innovative. Vi and BSNL remain critical to maintaining this balance. Their revival is not a matter of corporate rescue but of economic policy. If India wants to sustain its digital public infrastructure and affordability goals, it cannot let competition collapse.
Vodafone Idea’s legal reprieve
The Supreme Court’s decision to allow a re-evaluation of Vi’s AGR dues gives the company a rare chance at survival. Vi has asked the department of telecommunications (DoT) to reassess its liabilities under the Deduction Verification Guidelines of 2020, which provide a framework for fairer calculation of dues. The Court’s observation that there is “no reason” the government should not reconsider the issue highlights the need for a pragmatic approach.
With more than 200 million subscribers, Vi’s stability is crucial for systemic balance. The government already holds an equity stake in the company after converting part of its dues into shares. This position can be used strategically — to create accountability, not dependency. A calibrated restructuring of Vi’s liabilities, tied to measurable performance benchmarks, could allow it to regain operational footing without creating moral hazard.
Reimagining BSNL as a competitive force
Bharat Sanchar Nigam Ltd. (BSNL), though often dismissed as a relic of the past, still carries strategic weight. With its extensive rural reach and public-sector credibility, BSNL can serve as a counterweight to private dominance if modernised decisively. The focus should be on accelerating its 4G and 5G rollout, offering affordable data packages to lower-income users, and leveraging its infrastructure for public-sector connectivity projects.
Signs of revival are visible — BSNL has begun regaining ground in price-sensitive regions — but it remains hamstrung by legacy inefficiencies. To change that, the government must ensure BSNL’s operational autonomy and financial flexibility. Bureaucratic controls and procurement delays need urgent reform. Freed from administrative constraints, BSNL can evolve from a passive incumbent into an active competitor capable of forcing market correction.
Linking telecom competition to 5G and Digital India
India’s ambitions for a trillion-dollar digital economy depend on the rapid spread of 5G and next-generation connectivity. A concentrated market risks slowing that transition. With just two dominant players, the pace of rollout, diversity of use cases, and regional coverage may all suffer. When competition weakens, incentives to innovate decline — and that affects everything from smart manufacturing and autonomous mobility to AI-driven health services.
Ensuring that multiple operators remain viable is therefore not just a question of pricing or consumer choice; it is about maintaining the momentum of India’s digital transformation. A more competitive telecom ecosystem is essential for the full economic impact of 5G to materialise.
Financial sustainability and tariff reform
The conversation on competition must also confront the economic reality of India’s low ARPU (average revenue per user), which remains among the lowest globally. Rock-bottom tariffs helped democratise access to data, but they have also hollowed out the financial health of operators. No company can invest sustainably in 5G infrastructure, network densification, or rural expansion while returns stay wafer-thin.
The government and the regulator need to balance consumer affordability with industry viability. Rational tariff structures, predictable regulatory policies, and a shift from price wars to service quality are vital if India’s telecom players are to survive, innovate, and expand without perpetual financial stress.
Strengthening the regulator’s role
The Telecom Regulatory Authority of India (TRAI) must reassert its role as a guardian of fair competition. Over the past decade, regulatory inertia has allowed market power to consolidate and pricing distortions to go unchecked. A stronger, more independent regulator could prevent coordinated price movements, mandate transparency in spectrum allocation, and enforce market conduct rules that encourage new entrants.
If India is serious about creating a balanced telecom market, it must strengthen institutional capacity as much as corporate balance sheets. Without a proactive TRAI, even well-intentioned reforms may fail to deliver durable competition.
Policy tools for a level playing field
Creating a fair market requires more than intent. India’s telecom policy must evolve from being revenue-maximising to competition-enhancing. The government has several levers it can pull to achieve this.
It must ensure that the financial restructuring of distressed players like Vi is transparent and conditional, offering support only where turnaround plans exist. Infrastructure sharing should be incentivised so that smaller players can reduce capital costs through common use of towers and fibre networks. The spectrum allocation policy needs a rethink; historically, auctions have favoured deep-pocketed incumbents, locking out smaller firms. Rational pricing, longer payment tenures, and deferred spectrum fees could make the field more equitable.
India should also encourage the emergence of virtual network operators (VNOs) and regional telecom providers to introduce new competition layers. These smaller players can plug market gaps, especially in rural and enterprise segments, if given regulatory support. The Telecom Regulatory Authority of India (TRAI) must ensure that tariff structures and market access remain open to new entrants.
India’s telecom industry: From survival to sustainability
India cannot afford to slip into a de facto telecom monopoly. The digital economy—spanning payments, education, health, and e-governance — depends on broad-based access and affordability. When two companies dominate, consumer choice narrows, innovation stalls, and prices tend to rise.
The government’s recent actions — converting liabilities into equity, signalling openness to AGR relief, and acknowledging systemic risks — mark a step in the right direction. But survival is not enough. Vi must become viable, able to compete on quality and pricing. BSNL must evolve into a modern, tech-driven player, not just a government appendage. Together, they can inject diversity into a market that sorely needs it.
Reviving struggling telcos is not an act of charity. It is an act of national interest. Telecom is the backbone of India’s digital public infrastructure and a pillar of economic resilience. Only a competitive market—with four or five strong operators — can ensure that innovation thrives, consumers get value, and India’s digital ambitions remain inclusive.