The Indian telecom sector is a key driver of the Indian economy, contributing about 6 per cent to India’s GDP. It is the world’s second largest, with a subscriber base of 1,203.69 million, high data consumption, and ongoing expansion into 5G services and beyond. Yet, it faces several challenges which is not only slowing down its growth but also holding it back from becoming the top global player.
With the Union Budget 2025-26 around the corner, the telecom sector is expecting the government to create a more conducive environment which will not only help the sector grow and expand, but also help the operators take faster investment decisions and improve service quality.
On top of the agenda for the telecom operators is the high spectrum costs which is increasing their debt burden. This, coupled with low revenue realisation due to relatively lower average revenue per user (ARPU), is impeding investment in next-gen network infrastructure. The sector is expecting the government to reduce spectrum costs to reduce their debt burden.
At the same time, the industry has been long urging the government to rationalise taxes, and abolish the Universal Services Obligation Fund (USOF), apart from a reduction in Spectrum User Charges, and licence fees, to boost investment. The industry is also expecting some activity in reduction of license fees and removal of non-telecom revenues from the definition of Gross Revenue. Additionally, the existing moratorium on Adjusted Gross Revenue (AGR) dues has given the much-needed relief to operators with high debt levels. The industry expects the government to extend the moratorium to provide further relief to the operators.
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