Historically, the Indian telecom market has been an oligopoly, where a few firms held a majority of the market share. This market structure persisted for many years until the entry of Reliance Jio in September 2016. Reliance Jio’s entry, followed with drastic price reductions and low data prices was a game-changer, making it the most dominant firm in the industry. By March 2024, Reliance Jio (40.3%), Bharti Airtel (33.1%), Vodafone Idea (18.86%) control 92% market share.
The Internet has become the backbone of global information flow, making it as important as land, labour, and capital. Telecom services now reach every part of India, driving a society of innovation and technology. Since major reforms in 1991, India’s telecommunications sector has led the way and will mark 30 years of commercial mobile phone service in 2025.
After the recent 2024 General Elections, major Telecom Service Providers (TSPs) announced significant price hikes. In this article, we delve into the evolution and current landscape of the telecom industry in India.
Indian Telecom Industry and its evolution over the years
India’s telecom sector is one of the largest and fastest-growing networks globally. Initially, the telecom sector was a state monopoly, with telephone and postal services managed by the Department of Posts and Telegraphs until the creation of the Department of Telecommunications in 1985. This period also saw the establishment of Mahanagar Telephone Nigam Limited (MTNL) for Mumbai and Delhi operations and Videsh Sanchar Nigam Limited (VSNL) for international services. The 1990s brought pressure to open the sector to private investment, part of the broader Liberalization, Privatization, and Globalization policies necessitated by the fiscal crisis and balance of payments issues in 1991. The 1994 National Telecom Policy introduced significant changes, fostering private competition and expanding telecom access to all villages.
Owing to the partial failure of this policy, a New Telecom Policy was brought in 1999, aiming to provide internet access to all district headquarters by 2000 and make available telephone on demand by the year 2002 and sustain it thereafter to achieve a tele density of 7 by the year 2005 and 15 by the year 2010. Subsequently, given the low level of internet penetration in India, the Broadband Policy, 2004 was laid down to realize the potential of broadband services.
Further, the National Telecom Policy 2012 (NTP 2012) was launched to address the significant digital divide and slow telecommunications expansion in rural areas, which accounted for only 34% of total connections. Its vision of “Broadband on Demand” aimed to empower all citizens and businesses to participate in the digital economy, ensuring equitable development. NTP 2012 also focused on enhancing access to e-governance and m-governance in key sectors like health, education, and agriculture, and increasing the availability of spectrum for telecom services.
The National Digital Communications Policy, 2018 aims to harness the transformative power of digital networks to achieve digital empowerment and improve the well-being of Indians. By 2022, it sought to provide Broadband for All and enhance India’s contribution to global value chains. To operationalize ‘Broadband for All,’ a “National Broadband Mission” was established, focusing on equitable access to digital communications for all sections of society and bridging the digital divide.

Indian Telecom subscriptions at nearly 120 million in 2024, almost tripled from 2009
Due to the government’s measures over the years, the Indian telecom sector has experienced exponential growth, becoming the world’s second-largest network, behind only China. With a subscriber base of 1.19 billion, India ranks as the world’s second-largest country for telephone connections. The nation boasts 1200 million telephone connections, including 1165 million wireless and 34 million wireline subscribers. This marks the highest total subscriber count ever, nearly tripling from 430 million in 2009.
Exits, Mergers, and Consolidation: The Rise of Oligopoly in the Telecom Industry
The telecom industry’s steep fixed costs for spectrum licensing and technology, combined with significant economies of scale, make it challenging and unprofitable for numerous companies to remain in the market. These inherent barriers have limited the number of Telecom Service Providers (TSPs). In 1999, thirteen private mobile service providers operated with 2G technology under the New Telecom Policy. By 2019, this number had shrunk to eight due to mergers and exits, largely driven by the difficulties of navigating India’s evolving regulatory landscape.
A major turning point came in 2012 when the Supreme Court’s cancellation of 122 spectrum licenses dramatically impacted many operators. This led to the exit or sale of foreign telecom companies such as Norway’s Telenor, Russia’s Sistema, UAE’s Etisalat, and Bahrain Telecom. Further, to reduce costs and enhance their chances of survival, smaller telecom companies were acquired, and major operators like Vodafone and Idea merged. This evolving market structure aligns with the “rule of three,” an empirical finding that predicts mature markets typically support three primary competitors, with others relegated to niche roles. As of March 2024, the three major private sector operators—Jio, Airtel, and Vodafone-Idea—collectively control nearly 92% of India’s telecom market.
From Many to a Handful: The Shifting Market Share of Major Telecom Service Providers
The Indian telecom industry has the presence of both public and private sector operators. In the wireless segment, private operators have a dominant presence whereas in the wireline segment, public sector entities like BSNL (Bharat Sanchar Nigam Limited) and MTNL (Mahanagar Telephone Nigam Limited) hold a significant share. The key private sector players include Bharti Airtel, Vodafone Idea, Reliance Communications, and Tata Communications.
Historically, the Indian telecom market has been an oligopoly, where a few firms held majority of the market share. This market structure persisted for many years until the entry of Reliance Jio in September 2016. As of March 2017, Bharti Airtel was the major player, with almost 24% of the subscribers, followed by Vodafone at 18%, Idea at 17%, Jio at 9.3% and BSNL at 8.6%. Reliance Jio’s entry, followed by drastic price reductions and low data prices was a game-changer, making it the most dominant firm in the industry. By March 2024, the market is dominated by just five major players—Reliance Jio (40.3%), Bharti Airtel (33.1%), Vodafone Idea (18.86%), BSNL (7.57%), and MTNL (0.17%)—accounting for 98% of the total subscribers. The intense consolidation in India’s telecom sector is striking, with only four private and one public sector operator left to serve a billion-strong population.
Significant decline in Tele-density gap in Urban and Rural areas
Telephone density, or tele density, refers to the number of telephone connections per hundred individuals in a given area. This metric varies significantly between nations and also between urban and rural areas within a country. It is commonly used as an indicator of how deeply the telecom industry has penetrated different demographics and areas of a country. It is typically measured by the number of subscribers per 100 inhabitants.
Tele density can be broken down into categories such as wireless versus wireline, rural versus urban, and public versus private density. In India, while rural tele density has been increasing, it has not kept pace with urban tele density. In 2011, there was a nearly 130 percentage point gap in tele- density between urban and rural areas, which narrowed to 74 points in 2024, showing a greater penetration in rural areas.