Indian telecom sector reports steady growth in Q2 2024

The telecom sector in India witnessed steady growth in the second quarter of 2024, driven by an increase in Internet and broadband subscriptions and an expansion in the overall telecom subscriber base. The Indian Telecom Services Performance Indicator Report for April–June 2024, released by the Telecom Regulatory Authority of India (TRAI), also indicates that both urban and rural regions contributed to this growth, with broadband services continuing to play a major role in driving this.

This period saw a continuation of the sector's overall positive trajectory, with both wireless and wireline services recording gains. The growth in rural areas was particularly notable as efforts to bridge the digital divide began to show results. These trends are important for shaping India’s long-term digital infrastructure, supporting government initiatives, and enabling the digital economy.

Surge in Internet and Broadband Subscriptions

India’s Internet landscape saw notable growth in Q2 2024, with the total number of subscribers reaching 969.6 million, up from 954.4 million in the previous quarter. This represents a quarterly growth rate of 1.59%. The increase was driven primarily by wireless Internet services, which accounted for 927.56 million subscribers, while wired Internet users stood at 42.04 million.

The broadband sector showed even stronger momentum, expanding by 1.81% to 940.75 million subscribers by the end of June 2024. Broadband Internet continues to dominate the market, accounting for the vast majority of Internet subscriptions, with narrowband services declining from 30.34 million to 28.85 million over the same period.

The report highlights the growing Internet penetration in rural areas, which contributed to 407.33 million subscriptions. Urban areas still lead in total numbers, with 562.27 million subscriptions, but the rural Internet teledensity, at 45.12%, continues to rise, reflecting the increasing reach of digital services across India.

Growth in Overall Telecom Subscriptions

India’s telecom sector as a whole experienced a modest increase in subscriber numbers, with total telephone subscriptions—including wired and wireless services—growing by 0.53% from 1.199 billion at the end of March to 1.205 billion by June 2024. The wireless segment, which represents the majority of subscribers, also saw a quarterly growth of 0.43%, reaching 1.170 billion.

Urban regions contributed 667.13 million subscribers, while rural areas added 538.51 million, indicating that rural connectivity in India is continuing to grow. The overall teledensity in India increased slightly to 85.95%, with rural teledensity reaching 59.65% compared to 133.46% in urban regions. This growth reflects the ongoing efforts to enhance communication services nationwide, particularly in less-connected rural regions.

Although wireline services are a smaller part of the overall market, they also experienced a surge in subscriptions, rising from 33.79 million to 35.11 million, marking a growth rate of 3.90%. This sector’s rise, combined with the increase in wireless services, has contributed to the steady expansion of the telecom market.

Positive Financial Indicators for Telcos

The telecom sector's financial performance during the quarter was mixed. The sector's Adjusted Gross Revenue (AGR) stood at Rs 70,555 crore, marking a slight 0.13% increase compared to the previous quarter. The AGR grew by 7.51% yearly, indicating a more robust financial performance over the longer term.

Despite this, the telecom sector's Gross Revenue (GR) decreased by 2.16% to Rs 86,031 crore, while the Applicable Gross Revenue (ApGR) dropped by 1.02% to Rs 83,087 crore. These declines suggest some short-term financial pressures, but the steady increase in AGR points to resilience in the sector.

Additionally, the report noted improvements in wireless usage, with average data consumption per user reaching 21.30 GB per month. The overall Monthly Average Revenue per User (ARPU) for wireless services rose by 2.55%, driven by increases in prepaid and postpaid ARPU figures, which stood at Rs 154.80 and Rs 189.17, respectively.