Telecom Revenue Stalls
India's major telecom companies are seeing revenue growth slow down sharply. The market is full, with over 1.17 billion active users and little room for new customers. Even with price increases and big 5G spending, Average Revenue Per User (ARPU) is stuck at Rs 180-200. Data costs also remain low, about Rs 9 per GB. This means traditional ways of making money are not working well anymore. Axis Capital predicts the sector will see only 0-1% revenue growth in the coming months.
Targeting 60 Million Small Businesses
The focus is now shifting to India's 60 million Micro, Small, and Medium Enterprises (MSMEs) as the next growth area. Experts suggest telcos could earn significant revenue by offering MSMEs digital services, like online sales platforms and local advertising. If companies can reach just some of these businesses, earning small commissions on daily transactions could lead to large annual earnings. MSMEs already make up about a quarter of India's advertising spending, according to Shilpa Malaiya Singhai, MD at Alvarez & Marsal India. Telecom firms have advantages like wide reach, customer data, strong networks, and existing billing systems that can help them tap this market.
Hurdles Ahead for MSME Plan
However, making this new revenue a reality is not simple. Analysts warn that achieving the estimated Rs 50,000 crore yearly opportunity means telcos must provide a full package of digital tools, such as cloud services, payment systems, and marketing help, not just transaction fees. Harsh Walia from Khaitan & Co. pointed out that the current low ARPU is a structural issue, meaning MSME revenue growth will be slow and depend on many factors. Many MSMEs also struggle with limited budgets, and over half still lack reliable internet access, creating major obstacles to expanding this strategy.