India’s telecom sector gains strength on 5G adoption, Ind-Ra

India’s telecom sector is witnessing stronger growth among leading private operators as rising data consumption and rapid 5G adoption bolster industry fundamentals, although execution gaps are likely to keep credit profiles uneven across companies, according to a report by India Ratings and Research (Ind-Ra).

The ratings agency said incremental subscriber additions are expected to remain concentrated among larger operators with stronger network quality and execution capabilities, reinforcing competitive divergence in the sector.

“While the structural demand drivers remain favourable, disparities in execution across operators are likely to sustain uneven credit profiles over the near to medium term,” Priyanka Bansal, Director, Corporates at Ind-Ra, said in the agency’s May 2026 telecom credit digest.

India’s total telecom subscriber base reached 1,337 million, comprising 1,289 million wireless users, underscoring the continued dominance of the wireless segment, which accounts for more than 96 per cent of all subscribers, the report said.

Reliance Jio Infocomm added 3.4 million subscribers in April 2026, while Bharti Airtel gained 3.2 million subscribers during the month. In contrast, Vodafone Idea and state-owned Bharat Sanchar Nigam Limited (BSNL) reported negligible growth, highlighting widening competitive differences among operators.

Ind-Ra said this trend is likely to persist over the near to medium term as stronger operators continue to leverage network investments and service quality to attract new users.

The report also pointed to improving subscriber quality across the sector. The visitor location register (VLR), a key indicator of active users, rose to 93.8 per cent in April 2026 from 92.6 per cent a year earlier.

The active subscriber base increased by 7.9 million month-on-month to 1,194 million, driven primarily by gains at Bharti Airtel and Reliance Jio. Airtel added 5.4 million active users during the month, while Jio gained 3.0 million. These additions offset a decline of 0.9 million active users at BSNL, while Vodafone Idea’s active subscriber base remained largely unchanged after a brief recovery in March.

According to Ind-Ra, a higher share of active users improves revenue visibility and cash-flow stability because of its close relationship with average revenue per user (ARPU).

Data consumption continues to be a major growth driver for the industry. Average monthly data usage has risen sharply to between 20 GB and 66 GB per user in the fourth quarter of fiscal year 2026, compared with 6 GB to 11 GB in fiscal year 2019, the report said.

Broadband penetration also increased to 79.6 per cent in April 2026 from 77.3 per cent a year earlier, indicating deeper adoption of data services across the country.

Meanwhile, 5G adoption has accelerated rapidly since the commercial rollout. Ind-Ra estimated 5G penetration at around 40.3 per cent, representing approximately 434 million subscribers as of the third quarter of fiscal year 2026.

The ratings agency said rising data consumption, broader broadband adoption and migration to newer technologies are expected to support further monetisation opportunities and ARPU growth, provided operators align pricing strategies with network investments.

Fixed wireless access subscribers are also growing, although they continue to represent a relatively small share of the overall market.

Ind-Ra said favourable structural demand trends continue to support the sector’s operating metrics, reflected in a growing subscriber base, improving active-user ratios and evolving consumption patterns.

However, the agency cautioned that the ability of telecom companies to translate these trends into sustainable financial performance will depend largely on operator-specific strategies, efficient 5G rollouts and disciplined capital expenditure.

“Sustained data monetisation, efficient 5G rollout, and disciplined capex will be critical to maintaining balance sheet stability,” Bansal said. BW Businessworld