India's telecom sector is experiencing significant growth and transformation, driven by increasing smartphone penetration, the rollout of 5G technology, and supportive government policies. The sector is the second largest in the world in terms of telephone users, with over 1.19 billion subscribers as of September 2024. As of 2025, India has more than 1.25 lakh startups and 110 unicorns and is the third-largest startup ecosystem in the world. However, according to Department of Telecommunications (DoT) secretary Neeraj Mittal, India needs more telecom unicorns.

Current State of the Telecom Sector

The Indian telecom market reached USD 35.1 billion in 2024 and is expected to reach USD 71.3 billion by 2033, exhibiting a growth rate (CAGR) of 7.79% during 2025-2033. This growth is fueled by increasing smartphone adoption, the rapid rollout of high-speed networks like 5G, and government initiatives such as Digital India and BharatNet. The total number of internet subscribers in India increased by 8.3% between March 2023 and March 2024, rising from 881.25 million to 954.4 million. Broadband subscribers have also seen substantial growth, increasing from 846 million in March 2023 to 924 million in March 2024.

Several key players dominate the Indian telecom market, including Reliance Jio Infocomm, Bharti Airtel, Vodafone Idea Limited, Bharat Sanchar Nigam Limited (BSNL), and Mahanagar Telephone Nigam Ltd (MTNL). These companies have been instrumental in expanding connectivity and driving technological innovation in the sector.

Government Initiatives and Support

The Indian government has been actively promoting the growth of the telecom sector through various initiatives and policy reforms. The DoT has amended the Unified Licence for telecom operations, allowing operators to share active telecom infrastructure, thereby lowering costs and accelerating network rollouts. The government has also fast-tracked reforms to support telecom companies and has implemented policies to encourage domestic telecom equipment manufacturing.

In early 2025, the Union Cabinet cleared a Rs 1 lakh crore research, development, and innovation (RDI) scheme, which the government believes will give momentum to telecom startups in India. Furthermore, the Telecom Act 2023, set to be fully implemented by mid-2025, aims to modernize and streamline telecom regulations, simplify the licensing framework, and encourage greater participation from startups and SMEs. The Act also includes provisions for transparent spectrum management and enhanced consumer protection.

The Need for More Unicorns

Despite the growth and potential of the Indian telecom sector, there is a need for more unicorns to drive innovation and competition. As of early July 2025, India has minted only five new unicorns this year. More telecom unicorns can bring in fresh ideas, innovative technologies, and disruptive business models, accelerating the sector's growth and competitiveness.

The DoT is committed to supporting startups in the quantum technology space, recognizing their potential to drive groundbreaking innovations and propel India's leadership in the global quantum landscape. The government is also working on aligning policies with global best practices to attract foreign investments and technological collaborations. India and the UK have agreed to explore potential joint initiatives in telecom, AI, and emerging technologies, further strengthening India's position in the global telecom arena.

Challenges and Opportunities

While the Indian telecom sector has made significant strides, it also faces challenges such as macroeconomic uncertainty and geopolitical issues. Investors have become more cautious, prioritizing profitability and sustainable unit economics over rapid growth. However, nearly three-fourths of Indian tech startups remain optimistic about the funding outlook for 2025, and around 98% anticipate promising revenue increases.

To foster the growth of telecom unicorns, it is crucial to create an environment that encourages innovation, provides access to funding, and reduces regulatory hurdles. The government's focus on R&D, coupled with initiatives like the 5G labs and experimental license modules, can play a vital role in nurturing telecom startups.