The Indian Telecom Industry has witnessed one of the biggest ups and down an industry could see over the past decade. The AGR Penalties had marred the balance sheet of the industry which made them quite vulnerable, and Reliance Jio made a perfect entry to hammer the last nail in the coffin for the beleaguered companies in the industry.

The industry has now only 3 players out of which only 2 major players account for more than 2/3 of the market share which are Reliance Jio and Bharti Airtel. Vodafone Idea is busy still fighting its own battle of raising funds and firefighting the eroding client base.

The Article covers a comprehensive overview of the Telecom sector, and it will quite frankly help you if you are trying to make a perception of the industry.

Key Telecom Industry Fundamental Metrics:

  1. Sector P/E: 21.30
  2. Average Return on Equity (ROE): Telecom Industry has been Battling a meagre Return on Equity, and Increasing the ARPU seems the only Viable option.
  3. Average Monthly ARPU: Rs.137.31, The Average Revenue Per User measures the revenue generated by a single Average User of a SIM Card. The ARPU has been on an uptrend with Airtel topping the ARPU rank and Vodafone Idea at the Bottom of the Rankings.
  • YoY Sector Revenue Growth: Registered 9.63% Growth YoY,  Total number of Internet subscribers increased from 836.86 million at the end of Jun-22 to 850.95 million at the end of Sep22, registering a quarterly growth rate of 1.68%.
  • Sector Debt/Equity: The sector has been dependent for debt to finance its operations the Average D/E for top Operator is high with exception of Vodafone Idea having a negative D/E Ratio, which implies high risk due to Liabilities outweighing Assets.


Huge market size: India is the second-largest telecom market in the world with over 1.2 billion mobile subscribers.

Strong network infrastructure: The Indian telecom industry has a strong network infrastructure with more than 22,000 towers and over 500,000 km of fiber-optic cables.

High growth potential: The Indian telecom industry has been growing at a steady pace and is expected to continue its growth trajectory.

High demand for data services: The increasing use of smartphones and other devices has led to a surge in demand for data services, making it a lucrative market for telecom companies.

Availability of skilled manpower: India has a large pool of skilled manpower, making it easier for telecom companies to recruit and train employees.


Poor quality of service: The Indian telecom industry has been plagued by poor quality of service, including frequent call drops and network congestion.

The price war among operators: The intense competition among telecom operators has led to a price war, which has adversely affected the profitability of the industry.

High debt levels: Many telecom companies in India are burdened with high levels of debt, which has limited their ability to invest in network upgrades and expansion.

Regulatory challenges: The Indian telecom industry is subject to a complex and evolving regulatory environment, which can make it difficult for companies to operate and grow.

Limited rural penetration: Despite the growth of the Indian telecom industry, there is still limited penetration in rural areas, which represents a significant untapped market.


5G rollout: The upcoming 5G rollout presents a significant opportunity for telecom companies to offer new and innovative services to customers.

Digital India initiative: The government’s Digital India initiative aims to increase internet connectivity and digital literacy in the country, creating new opportunities for the telecom industry.

Rising demand for broadband services: The increasing demand for high-speed internet and broadband services presents a significant opportunity for telecom companies to grow.

Smart cities initiative: The government’s smart cities initiative is expected to create new opportunities for telecom companies to offer smart infrastructure solutions.

IoT and M2M services: The growth of the Internet of Things (IoT) and machine-to-machine (M2M) services presents new revenue streams for telecom companies.


Interest rates: The Telecom Industry is Heavily dependent on debt to finance its capital-intensive operations, thus rising interest rates can seriously dent the profit margin of these companies and also halt the planned potential capital expenditure for the long term.

Intense competition: The Indian telecom industry is highly competitive, which leads to price wars and margin erosion.

Disruptive technologies: Emerging technologies such as over-the-top (OTT) services and Voice over Internet Protocol (VoIP) can disrupt traditional revenue streams for telecom companies.

Economic slowdown: A slowdown in the Indian economy can lead to a decrease in consumer spending on telecom services, The short-term projected growth rate of GDP for next year as per RBI is less than the current Growth rate.

Cybersecurity risks: As the Indian telecom industry becomes more digital, it faces increased cybersecurity risks, which can lead to data breaches and reputational damage.

Regulatory challenges: The regulatory environment in India is complex and evolving, which can create uncertainty for telecom companies and limit their ability to operate and grow.

Thus, the latest developments have pushed the industry into an oligopolistic structure where providing low-cost service has become the subject of competition, which has led to the erosion of the margins of the companies.

The industry has turned less attractive since rising interest rates, and high discounts, which have shoved the ROE and Margins to meager as compared to other sectors.