THE country’s private telecom operators face twin challenges on investment recovery in the New Year – customers leaving their network after tariff hikes and satellite players mainly Elon Musk’s Starlink eyeing a chunk of their bread and butter data business. Private operators have invested around Rs 70,000 crore in telecom infrastructure and radiowave assets this year to expand the coverage of next-generation 5G services which is one of the main highlights of 2024 for the sector. To recover investments and protect margins, private telcos resorted to tariff hikes in mid-year but that move backfired. Around 2 crore subscribers dropped their connections. Reliance Jio, Bharti Airtel and Vodafone Idea jointly lost 2.6 crore customers due to a 10-26 per cent price hike. Around 68 customers switched to state-run player BSNL which refrained from price hike.

 

The loss-making PSU still offers generation-old 3G service and is on the path of rolling out 4G network across the country. Despite subscriber loss, private players need to recover investment and invest more in 5G to offer new-age services to drive future growth. According to EY India Markets and Telecom leader Prashant Singhal, the cumulative investment of Reliance Jio, Bharti Airtel and Vodafone Idea was around Rs 70,200 crore in 2024. Digital Infrastructure Providers Association (DIPA) Director General Manoj Kumar Singh says the telecom infrastructure sector looks at a cumulative investment of Rs 92,100 crore to Rs 1.41 lakh crore in 2022-2027 to support the 5G ecosystem. Union

 

Minister Jyotiraditya Scindia also backed telecom operators on the tariff hike issue citing investments made by companies in the network. The rollout of 5G services in 2024 has paved the way for the adoption of emerging technologies like artificial intelligence which offers huge growth potential. “5G deployment has been a game-changer. We’ve witnessed a significant surge in 5G base transceiver stations, rising from 412,214 in December 2023 to 462,854 by November 2024,” says DIPA, whose members include Indus Towers and American Tower Corporation. Impending huge investments in 5G and maintaining healthy margins in the face of subscriber loss are not the only challenges for private telecom players. A new threat from satellite broadband service providers is staring at private telcos in the New Year. The satellite broadband sector has seen intense lobbying on the spectrum allocation issue in 2024. Private telecom operators led by Mukesh Ambani-promoted Jio have been for strongly protesting against the administrative allocation of spectrum to satellite broadband service providers like Elon Musk’s Starlink. Telcos fear that allocation of radiowaves to satellite broadband providers without auction will come at a low price and make a dent in their data subscriber market share. The Government’s decision to allocate satcom spectrum without auction also saw political mud-slinging with opposition members equating the move with 2G spectrum case. As per the Comptroller and Auditor General of India (CAG), 2G spectrum allocation caused a notional loss of Rs 1.76 lakh crore to the national exchequer.