The rise of duopoly in India’s telecom sector: A wake-up call

We are increasingly at the mercy of Airtel and Jio, as the Indian telecom market rapidly consolidates into a duopoly. With little meaningful competition remaining, these two giants are able to raise prices almost at will, leaving consumers with no real choice but to accept the increases. The likelihood of a new entrant disrupting the market is extremely low, given the enormous capital investment, spectrum acquisition costs, and regulatory hurdles involved in entering the telecom space. Any genuine competition has been reduced to dust, as Jio and Airtel, alongside the struggling Vodafone Idea,now account for approximately 91–92% of all telecom subscribers in India.

India currently offers some of the lowest telecom prices in the world, which explains why many consumers appear indifferent to this ongoing consolidation. For most people, having just two dominant operators seems like an acceptable trade-off if it means continuing to pay as little as between Rs15 to 20 for 1 GB of data, especially when compared to countries where the same amount of data could cost Rs 150 or more, despite a greater number of service providers.

This extreme affordability has, in effect, muted public concern about the lack of competition. However, while low prices may be attractive in the short term, a duopoly could eventually lead to higher tariffs, reduced innovation, and declining service quality. It is essential for consumers to recognise the long-term consequences of limited choice, even if the immediate benefits appear significant.

In a recent statement, India’s Union Telecom Minister, Jyotiraditya Scindia, acknowledged this concern, stressing that a duopoly, or the presence of just two major telecom operators, is inadequate. According to Scindia, India needs robust competition across all sectors.

"Our job is to provide as many avenues as possible and, within each vertical as well, ensure intense competition. It's not good enough having a duopoly of one carrier or two carriers," Scindia said.

Providing telecom services requires operators to invest a substantial portion of their annual earnings in acquiring spectrum. These services generate revenue, which in turn funds further investments in infrastructure and assets. However, one of the key structural challenges facing the Indian telecom sector is that the government controls the pricing of many critical assets, particularly spectrum. Additionally, the government levies a licence fee that accounts for a significant portion of an operator’s income.

Vodafone Idea, for instance, owes approximately Rs 84,000 crore to the government in Adjusted Gross Revenue (AGR) dues. This burden has severely limited its ability to raise funds through debt. There is speculation that the government may eventually intervene with a solution, which could ease Vi’s path to raising capital and regaining stability.

Alongside Vi, the government is also working to revive Bharat Sanchar Nigam Limited (BSNL). The state-owned telecom provider aims to attract new users, and retain its existing base, through a nationwide rollout of 4G services. BSNL has also begun offering Q-5G Fixed Wireless Access (FWA) services as part of its broader revival strategy.

So, what can be done?

One practical step consumers can take is to support the third players in the market. For dual-SIM users currently relying on Airtel and Jio, switching their secondary SIM to Vodafone Idea could help sustain its presence in the sector. While Vi has a smaller subscriber base and infrastructure gaps in some regions, using it, even as a backup SIM, sends a message that consumer choice and market competition matter. A viable third option, even if not the primary one, may lead to better pricing, improved service quality, and a more balanced telecom environment in the long term.

Consumers could also consider purchasing a BSNL connection, particularly once its 4G network is fully operational. If a sufficient number of people adopt BSNL, at least in regions where coverage is decent, it could slightly erode the market dominance of private players. Although BSNL has historically lagged behind in performance, supporting a government-backed operator could help reintroduce essential competition into the sector. While not a complete solution, even small shifts in consumer behaviour can send a powerful signal: people value choice and are willing to support alternatives that challenge Airtel and Jio’s dominance.

While Airtel and Jio’s dominance may appear inevitable, it is not irreversible. A combination of thoughtful consumer behaviour, smarter regulation, and strategic support for struggling providers like Vi and BSNL can preserve competition in India’s telecom sector, not instantly, but gradually and meaningfully over time.