India Telecom Market: 4G Growth and the Road to 5G

India’s Telecom Market During the Covid-19 Period

The Covid-19 outbreak affected economies and industries around the world, and India was no exception. However, data from the Indian telecom market during 2020 showed that the mobile sector remained relatively resilient despite the wider economic disruption.

In Q2 2020, eight of the ten countries most affected by the pandemic reported negative year-on-year mobile revenue growth. India and Brazil were the only two among them to report positive mobile revenue growth.

Several indicators help explain how India’s telecom sector performed during this period.

Revenue and ARPU Growth

Indian telecom operators reported strong revenue performance during the quarter ended June 2020 despite the nationwide lockdown.

Reliance Jio and Bharti Airtel, which together represented more than 60% of the subscriber market at the time, recorded stronger ARPU and positive annual revenue growth. Jio reported annual revenue growth of 33.7%, while Airtel reported 14.7%. Vodafone Idea, meanwhile, experienced declines in revenue and ARPU during the quarter.

Tariff increases introduced before the pandemic also contributed to higher ARPU. Combined with growing mobile data usage, these changes helped support operator revenues during a difficult economic period.

Growing Dependence on 4G LTE and Mobile Broadband

One of the most important factors was India’s large population and its increasing dependence on mobile connectivity.

By June 2020, LTE subscriptions in India had increased by around 26% year on year to approximately 644 million. This reflected the growing importance of 4G LTE networks for communications, internet access, entertainment, education and remote working.

Fixed broadband penetration was relatively limited. According to TRAI data cited at the time, India had approximately 683 million broadband subscribers in May 2020, including around 664 million mobile broadband users and only about 19 million fixed broadband subscribers.

As lockdowns increased demand for online services and remote working, much of the additional data traffic therefore had to be carried by mobile networks.

Increasing Mobile Data Traffic

The rapid increase in mobile data consumption placed additional pressure on LTE network capacity.

With millions of users relying on mobile broadband, operators needed sufficient spectrum and network infrastructure to maintain service quality. This highlighted the importance of additional spectrum, network modernization and investment in digital infrastructure.

Mobile data traffic trends in India during Q2 2019–Q2 2020. Source: GSMA Intelligence.

For markets with limited fixed broadband coverage, 4G LTE networks also demonstrated how important wireless broadband can be in providing internet connectivity to homes and businesses.

Spectrum and Network Capacity

The increase in data traffic also highlighted India's need for additional mobile spectrum.

At the time, industry discussions focused on making more harmonized spectrum available and improving backhaul capacity. E-band and V-band spectrum were considered potential options for supporting network modernization and preparing existing 4G infrastructure for future 5G deployment.

Additional spectrum could help operators expand network capacity while responding to continued growth in mobile broadband traffic.

5G and Fixed Wireless Access Opportunities

The development of 5G was also expected to create new opportunities for the Indian telecom market.

Industry analysis at the time suggested that mmWave spectrum could support enhanced mobile broadband (eMBB) and fixed wireless access (FWA). These technologies offered the potential for higher capacity, lower latency and faster wireless broadband connections.

FWA was particularly relevant in markets where fixed-line broadband infrastructure remained limited. By using 4G or 5G wireless networks to provide broadband connectivity, operators could potentially extend high-speed internet services without relying entirely on traditional wired infrastructure.

Digital Infrastructure and Future Connectivity

India’s growing number of internet users also increased the need for investment in fiber connectivity, mobile networks, spectrum and other digital infrastructure.

As demand for online entertainment, remote working, education, cloud services and other digital applications increased, telecom operators faced the challenge of expanding network capacity while maintaining reliable connectivity.

The experience of the Covid-19 period demonstrated the important role of mobile broadband in India. Strong demand for 4G LTE connectivity, combined with continued network investment, also helped establish the foundation for the country’s future transition toward 5G, FWA and next-generation wireless broadband services.

For mobile broadband equipment manufacturers, the development of large telecom markets such as India also highlights the continuing importance of 4G/5G CPE, FWA routers and other wireless broadband devices in connecting homes, businesses and users where mobile networks play a major role in internet access.