India's telecom sector faces a growing challenge as mobile data consumption is projected to rise much faster than operators' revenues, the pressure on companies is expected to convert the surging network demand into stronger financial returns.
Mobile network traffic in India is expected to grow at around 17% annually between 2025 and 2030, while telecom operator revenues are forecast to increase by just 2.7% a year, according to a report by KPMG in India.
The widening gap between usage and revenue growth comes as the country's digital ecosystem expands across artificial intelligence (AI), cloud computing and other data-intensive services.
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Operators will need to navigate rising demand while finding ways to capture greater value from their network investments.
India's telecom equipment market is also expected to expand rapidly, nearly doubling from $25 billion in FY25 to $50 billion by FY32. The market is projected to grow at almost twice the rate of the global industry, the report said.
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Domestic manufacturing has strengthened alongside this expansion. India's handset production reached Rs 6,270 billion in FY26, while import substitution in telecom equipment stood at approximately 60%, indicating increased domestic manufacturing capabilities.
KPMG said India's next opportunity lies in moving beyond its role as a provider of connectivity to developing technologies, platforms and intellectual property for global markets.
“The convergence of telecommunications, AI, semiconductors, cloud and digital infrastructure is redefining how value is created in the global technology ecosystem,” said Akhilesh Tuteja, Partner and National Leader for Clients and Markets and Technology, Media and Telecommunications at KPMG in India.
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Tuteja said the country could emerge as a creator of globally relevant technologies, but realising that potential would require sustained investment in innovation, advanced manufacturing and collaboration across the ecosystem.
The report highlights the need for India to strengthen its position across the global technology value chain as telecom networks evolve into intelligent digital infrastructure.
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