Thirty-five years ago, getting a telephone connection in India was an event to be celebrated. Waiting periods typically stretched into months, if not years, for a landline connection to be sanctioned, wired and finally installed. According to reports from Business Standard, tele-density was in the low single digits, and the idea of a mobile handset in every pocket was simply unthinkable. Sandeep Arora, vice-president and Industry Platform Leader for Telecom — India at Capgemini, described the pre-liberalisation era as a scarce, state-run utility with limited access and high pricing. The sector has evolved dramatically since the 1991 economic liberalisation that ended four decades of licence-control, with telecom now contributing about 12-14% of India's GDP and serving as the backbone of the digital economy.
The telecom sector's transformation began with the National Telecom Policy 1994 and later the New Telecom Policy of 1999, opening the sector to private players and allowing foreign direct investment. As reported by Business Standard, these policies moved from fixed licence fees to a revenue-sharing model, creating an independent regulator in the Telecom Regulatory Authority of India (Trai). The 1999 policy introduced the revenue-share model which triggered the fall in tariffs from ₹16-17 per minute at that time. S P Kochhar, Director General of the Cellular Operators Association of India (COAI), noted that the reforms changed the way India thought about infrastructure, competition, technology and private participation. The entry of private players like Bharti Airtel, Hutchison Whampoa, Idea Cellular, BPL Mobile and Spice Communications ended the duopoly of public sector units, making the market capital intensive and competitive.
The mobile revolution began on July 31, 1995, when West Bengal's then Chief Minister Jyoti Basu placed India's first mobile phone call to Union Communications Minister Sukh Ram over a network jointly built by BK Modi and Australia's Telstra, using a Nokia handset. According to Business Standard, wireless scaled rapidly with annual subscriber growth exceeding 30% in the early phases, driven almost entirely by mobile adoption. Akhilesh Tuteja, Partner and National Leader for Clients and Markets at KPMG in India, noted that this transformation from elite service to mass infrastructure was enabled by both reforms and technology working together. The sector crossed 1.34 billion telephone subscribers as of June 2026, with 1.3 billion on wireless connections and fewer than 47.8 million on fixed lines, achieving an overall tele-density of 94.3%.
The telecom sector has evolved into a more concentrated market structure, with two players controlling over 70% of the market. As reported by Business Standard, Mahesh Uppal, director of Com First India, flagged market concentration as a concern, noting that consumers have fewer options compared to the pre-2012 era when global players like Etisalat, Telenor, MTS were present. Uppal suggested that the best option would have been to merge BSNL with Vodafone Idea since the government is the largest shareholder in both companies. He advocated for encouraging virtual network operators (VNOs) through more liberal regulatory approaches, noting that India's VNO licensing has not taken off due to restrictive revenue-sharing regimes and lack of wholesale price obligations for resellers.
The telecom reforms have created a comprehensive digital ecosystem that underpins multiple industries. According to Business Standard, the sector has enabled equipment vendors, tower firms, fibre providers, handset manufacturers, app developers, digital payment platforms, startups, cloud services, cybersecurity companies and millions of digital entrepreneurs. Kochhar noted that telecom has changed categories within the economy, becoming the underlying infrastructure for almost every other sector. Arora emphasized that liberalisation repurposed telecom from a constrained voice network to a nationwide digital infrastructure layer, powering the growth of many other sectors. The sector now serves as the foundation for digital identity, healthcare access, enterprise digitisation, and emerging sovereign artificial intelligence capabilities, demonstrating its evolution from utility to critical national infrastructure.
