Mumbai: Telecom tariff increases in July 2024 have caused the pace of subscriber additions to slow in rural India, a geography that hitherto led urban markets in drawing more users.
Rural India added a net 790,000 subscribers in the 12 months preceding March 25, a miniscule gain as compared with the 15.27 million added in the previous fiscal year, showed an analysis by the Telecom Regulatory Authority of India (Trai).
"This is largely due to SIM consolidation after the tariff hikes as many rural households cut down on multi-SIMs and new connections," said Balaji Subramanian, vice-president, IIFL Securities.
"We expect a correction in rural net adds as both Airtel and Jio will continue to enhance rural rollouts in coming quarters," he added.
The trend was similar for urban regions, albeit with a narrower gap. In FY25, urban circles gained 730,000 telecom subscribers compared with a net addition of 11.67 million in the previous fiscal.
As of March '25, total rural and urban user bases stood at 534.69 million and 666.11 million respectively, Trai data showed.
Notably, teledensity, a measure of the number of telecom users per 100 people in a geographic area, has shrunk for urban India-to 131.45% from 133.72%. This means that an average urban user who has more than one SIM card is cutting down, the decision swayed by telecom packs becoming more expensive.
"Irrespective of the regional diversity, India's total broadband user base has reached 944.12 million, and getting the next 100 million users is going to be very challenging," said a senior telecom executive. "This is mainly because, for a very large rural population, even a ₹1,000 annual spend on a mobile device and recharge is unaffordable."
"But, we see a huge headroom for growth in rural markets as teledensity is at 59%. Lately, the refurbished smartphones market is burgeoning in these regions and even 5G FWA-based home connections are growing in tandem with urban numbers," the executive added.
According to Trai, the share of urban and rural wireless (5G FWA) subscribers was 62.97% and 37.03%, respectively at the end of March 2025. "This is significant, because FWA home connections are three-times more expensive than mobile packs. This shows immense appetite for data-hungry users in these markets," he said. He also noted that the gender divide of mobile ownership in India is reducing, meaning women will be leading growth contributors as new mobile owners going forward.
According to the GSMA Mobile Gender Gap report 2024, India's mobile internet gender gap reduced from 40% to 30% as more women users came online.
Prominent rural hotspots in Uttar Pradesh, Bihar, Karnataka are also consuming higher levels of data, though affordability is a concern as a large 2G user base has still not upgraded to higher revenue generating 4G/5G services, experts said.
Rural India added a net 790,000 subscribers in the 12 months preceding March 25, a miniscule gain as compared with the 15.27 million added in the previous fiscal year, showed an analysis by the Telecom Regulatory Authority of India (Trai).
"This is largely due to SIM consolidation after the tariff hikes as many rural households cut down on multi-SIMs and new connections," said Balaji Subramanian, vice-president, IIFL Securities.
"We expect a correction in rural net adds as both Airtel and Jio will continue to enhance rural rollouts in coming quarters," he added.
The trend was similar for urban regions, albeit with a narrower gap. In FY25, urban circles gained 730,000 telecom subscribers compared with a net addition of 11.67 million in the previous fiscal.
As of March '25, total rural and urban user bases stood at 534.69 million and 666.11 million respectively, Trai data showed.
Notably, teledensity, a measure of the number of telecom users per 100 people in a geographic area, has shrunk for urban India-to 131.45% from 133.72%. This means that an average urban user who has more than one SIM card is cutting down, the decision swayed by telecom packs becoming more expensive.
"Irrespective of the regional diversity, India's total broadband user base has reached 944.12 million, and getting the next 100 million users is going to be very challenging," said a senior telecom executive. "This is mainly because, for a very large rural population, even a ₹1,000 annual spend on a mobile device and recharge is unaffordable."
"But, we see a huge headroom for growth in rural markets as teledensity is at 59%. Lately, the refurbished smartphones market is burgeoning in these regions and even 5G FWA-based home connections are growing in tandem with urban numbers," the executive added.
According to Trai, the share of urban and rural wireless (5G FWA) subscribers was 62.97% and 37.03%, respectively at the end of March 2025. "This is significant, because FWA home connections are three-times more expensive than mobile packs. This shows immense appetite for data-hungry users in these markets," he said. He also noted that the gender divide of mobile ownership in India is reducing, meaning women will be leading growth contributors as new mobile owners going forward.
According to the GSMA Mobile Gender Gap report 2024, India's mobile internet gender gap reduced from 40% to 30% as more women users came online.
Prominent rural hotspots in Uttar Pradesh, Bihar, Karnataka are also consuming higher levels of data, though affordability is a concern as a large 2G user base has still not upgraded to higher revenue generating 4G/5G services, experts said.
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