India’s 60 million small businesses — Telecom’s next big revenue frontier

India’s telecom sector is increasingly looking beyond traditional subscriber growth as revenues plateau, with experts identifying the country’s vast base of nearly 60 million micro, small and medium enterprises (MSMEs) as the next major opportunity.

Subscriber additions have largely peaked, with the active base crossing 1.17 billion, while mobile data tariffs remain among the lowest globally at about ₹9 per GB. Despite tariff hikes and heavy 5G investments, wireless ARPU has remained largely stagnant in the ₹180–200 range, according to TRAI data. Axis Capital estimates sequential revenue growth at a modest 0–1% in Q4 FY26, underscoring the sector’s limited upside from traditional levers.

“The affordable, faster, more data playbook is nearly exhausted in India,” said Aditya Khaitan, TMT Partner at Deloitte.

Analysts now see MSME digitisation—spanning digital commerce, payments, and local advertising—as a key monetisation avenue. Deloitte estimates that if telcos onboard even one-sixth of MSMEs and earn a 3% commission on daily transactions, the opportunity could generate around ₹33,000 crore annually. Including local advertising, the total potential could rise to ₹50,000 crore.

MSMEs already account for about 24% of India’s ₹1.5 lakh crore advertising market, noted Shilpa Malaiya Singhai of Alvarez & Marsal. With strengths in distribution, first-party data, connectivity infrastructure, and billing relationships, telcos are well positioned to tap this segment.

However, execution challenges remain significant. Analysts caution that achieving the projected scale will require telcos to move beyond transaction commissions and build comprehensive digital service ecosystems, including cloud, payments, and marketing tools.

Structural constraints persist, with over half of MSMEs operating with investments below ₹5 lakh and more than 55% still lacking reliable internet access—factors that could slow adoption.

Meanwhile, competitive pressures continue to shape the sector. Reliance Jio and Bharti Airtel are consolidating market leadership, while Vodafone Idea struggles with high debt of over ₹2.09 lakh crore, delayed 5G rollout, and weaker active subscriber ratios. ARPU growth remains critical as operators seek to offset rising network and spectrum costs.

With limited headroom for subscriber expansion, the telecom sector’s next phase of growth will hinge on its ability to monetise digital services and deepen engagement with India’s MSME ecosystem.

CT Bureau