High spectrum costs and rural gaps weigh on India's telecom growth

High spectrum costs and legacy liabilities are squeezing telecom cash flows, prompting the industry to seek policy stability and recognition as critical national infrastructure

Key challenges

• High-spectrum costs and legacy liabilities continue to constrain free cash flow generation despite revenue recovery
• While average revenue per user (Arpu) has risen to ~174.46 per month, revenue realisation remains modest relative to network scale, limiting returns on next-generation infrastructure
• Connectivity gaps persist in deep rural and remote regions due to lack of viability, particularly in publicly funded networks
• The expansion of 5G technology, data centres, and cloud services increases the vulnerability of cybersecurity and resilience risks

Industry ask 

• Recognition of telecom as critical national economic infrastructure, alongside power and transport, to enable faster approvals and prioritised financing
• Policy stability across spectrum charges, Right of Way norms, and digital infrastructure classification, combined with enforceable single-window approvals
• Outcome-linked support via the Digital Bharat Nidhi to promote universal connectivity without structuring liabilities on private balance sheets
• Incentives for telecommunication manufacturing, R&D, and exports to strengthen India’s position in global value-added chains
• AIready digital infrastructure development Targeted investments in data centres, compute resources, available energy, and indigenous design for support of AI-powered network and intelligent operations capabilities

A PwC report