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September 01, 2019

Sector Report: Telecom Services

This report is available to users in India for ₹40,000 + applicable taxes


Table of Contents


  • Summary
  • Wireless
  • Wireline
  • Operating metrics
  • Revenues
  • Profitability
  • Competition
  • Regulations
  • Investments




Industry revenue expected to recover in fiscal 2020 only their primary SIM card.


The Indian telecom sector has been on a roller-coaster ride over the past few years. After posting losses in excess of Rs 40,000 crore in the last two years, the industry has consolidated, with the top three players - Vodafone Idea, Bharti Airtel and Reliance Jio - accounting for over 90% market share in revenue terms.


CRISIL Research believes the worst is over for the sector, with revenue projected to rise ~7-8% on-year in fiscal 2020. The expected growth would occur despite a drop in the subscriber base amid SIM consolidation and a saturated urban market. Average revenue per user (ARPU) will be the most crucial lever propelling revenue, with pricing stability, rural thrust and rising data volume supporting the trajectory


SIM consolidation to check industrys subscriber growth; rural segment to add subscribers


The wireless subscriber base in India, which was stable on-year at ~1,162 million at the end of fiscal 2019, is projected to decline 2-3% on-year in fiscal 2020. This is owing to introduction of the minimum recharge plan, which requires recharge of Rs 35 per month for subscribers to remain active on a network. This has, in effect, led to subscribers deactivating multiple SIMs and switching to primary SIM cards.


In fact, over the past few months, the large incumbents have reported a sharp decline in their active subscriber base. Majority of these are believed to be in urban areas, given the high tele-density of ~156% as of March 2019. In contrast, the underpenetrated rural segment, with a tele-density of ~57% as of March 2019, will continue to see subscriber addition.