Telecom sector needs a larger number of strong players

Telecom and aviation were amongst the most robust success stories in the post liberalisation era, transformed by the entry of several new private players. But today, both sectors are characterised by market concentration. The aviation sector in India is dominated by two players  — IndiGo and Air India. In the telecom sector, two strong private players —Jio and Airtel — account for around 75 per cent of the market. Vodafone Idea, which is a financially weak third player and partly owned by the government, occupies 16.5 per cent of the market, while state-owned BSNL accounts for just 8 per cent. As recent events in the aviation sector have also shown, this degree of market concentration has unhappy consequences. It underlines the need to facilitate healthy competition in sectors across the economy. In this context, reports pointing to the possible government exit from Vodafone Idea are welcome.

Vodafone Idea has been in a precarious financial position. As of December 2024, its total debt was around Rs 2.3 lakh crore, comprising AGR dues and spectrum liability. Its subscriber base has fallen from 213 million in September 2024 to 203.5 million in September 2025. A few days ago, the Union cabinet approved a relief package for the beleaguered telco, freezing its AGR dues (adjusted gross revenue) and rescheduling their payment over a 10-year period ending in FY41. Alongside providing clarity over its dues, as per a report in this paper, the government is also exploring the option of bringing in an investor, who could eventually take majority control. A new investor could infuse money into the telco to ensure its long-term viability. This is much needed. The sector would benefit from the presence of a larger number of financially strong players, and better serve consumer interest.

The importance of ensuring a level playing field cannot be emphasised enough. The rules of the game should be applied fairly, and to all. The telecom sector forms the backbone of the digital economy, the government needs to proceed carefully.

Overall Analysis

The editorial argues that excessive market concentration in the telecom sector poses risks to competition, consumer welfare, and the broader economy. It opens by recalling how telecom and aviation were once symbols of successful liberalisation, transformed by private competition. This historical contrast is used effectively to show how both sectors have drifted toward dominance by a few large players, setting up the central concern of the piece.

By presenting concrete market-share figures, the author highlights the imbalance in the telecom sector, where Jio and Airtel command the majority of the market, while Vodafone Idea struggles financially and BSNL remains marginal. The reference to recent troubles in the aviation sector serves as a cautionary parallel, suggesting that high concentration can lead to systemic vulnerabilities and poor outcomes for consumers.

The second paragraph focuses on Vodafone Idea’s fragile financial health, using precise data on debt and subscriber losses to underline the urgency of the situation. The tone here is analytical and pragmatic. The editorial welcomes the government’s relief measures and the possibility of a new investor, framing them not as bailouts but as steps necessary to preserve competition. The language stresses that a financially viable third private player would strengthen the sector and better protect consumer interests.

In the final paragraph, the author broadens the argument beyond one company. The emphasis on a “level playing field” reflects a policy-oriented perspective, asserting that fair and uniform rules are essential in a sector that underpins the digital economy. The concluding line urges caution, signalling that government intervention must balance fiscal responsibility, competition, and long-term economic health.

Important Vocabulary (5)

1. Liberalisation – the process of reducing government control to encourage private enterprise.
2. Market concentration – a situation where a small number of firms dominate a market.
3. Precarious – uncertain or unstable.
4. Beleaguered – under severe stress or difficulty.
5. Viability – the ability to survive and function successfully in the long term.

Conclusion & Tone

The editorial makes a clear case for sustaining multiple strong players in the telecom sector to ensure competition, stability, and consumer welfare. It supports limited government facilitation to rescue competition rather than protect any single firm, stressing fairness and long-term sectoral health.

Tone: Analytical, cautionary, and policy-focused, with an emphasis on economic reasoning and public interest.