This fiscal year, the sector has already seen a revenue rise of 44% YoY from ₹648.35 billion in FY23.
The Indian government expects to generate ₹1.2 trillion in revenue from the telecom sector for the fiscal year 2025, as stated in the interim budget released on Thursday. This forecast represents a 30% increase from the revised revenue target of ₹935.41 billion for FY24, and is expected to be driven by an upcoming spectrum auction and higher adjusted gross revenue (AGR) payments from telecom companies in FY25.
Part of this revenue increase is expected to come from a spectrum auction planned for later this year. Union Electronics and IT Minister Ashwini Vaishnaw stated that this auction would be limited, focusing on spectrum not sold in the previous year’s extensive auction, as the government aims to conduct auctions annually to fill any gaps.
This fiscal year has already seen a significant rise in sector revenue, including AGR dues and spectrum licensing fees, climbing 44% year-on-year (YoY) from ₹648.35 billion in FY23.
With 92% market share dominated by Bharti Airtel, Reliance Jio Infocomm and Vodafone-Idea, the telecom sector will see major growth in FY25. This includes potential demand from enterprises for industrial 5G and IoT services and the start of satellite-based communication services following satellite spectrum allocation by the government.
The telecom sector’s revenue in FY26 could boost further when the moratorium on spectrum acquisition payment rounds for telecom operators ends in September 2025. Prepayments from telecom operators could contribute around ₹100 billion in FY25, although some of this amount may be offset by prepayments made in FY24.
Despite calls from telecom operators for relief from Universal Service Obligation Fund (USOF) dues and a reduction in licence fees among other concessions, the government’s revenue projection suggests that industry fees will remain in place.
Industry experts have expressed surprise at the higher-than-expected revenue forecast. Prashant Singhal of EY Global and other analysts believe that the projection hints at another spectrum auction for 5G, as previously indicated by the telecom minister. They are, however, sceptical about 5G or satellite communications (satcom) spectrum allocation’s contribution to this revenue increase.
