A Guide to Government Assistance for Telecom Companies

Here is a detailed overview of government support scenarios for the Indian telecom companies and this sector in 2025:

Government Support Scenarios for Telcos in India

1. Capital Expenditure Support for State-Owned Telcos
   • The government has recently approved an additional ₹6,982 crore for BSNL’s 4G network rollout in 2025. This is part of a larger revival package totaling over ₹3.22 lakh crore provided in tranches since 2019 to support BSNL and MTNL, enabling capital-intensive network expansion and modernization. This financial backing has also helped BSNL return to operating profits in recent quarters.
2. Policy Frameworks Encouraging Growth and Investment
   • India’s draft National Telecom Policy 2025 (NTP-25) aims to create a resilient, inclusive, and innovation-driven telecom ecosystem. It supports digital infrastructure growth, domestic manufacturing (PLI scheme), universal connectivity, and 5G/6G adoption. NTP-25 targets doubling telecom exports, startups, and jobs by 2030, which indirectly aids telcos’ business environment and access to skilled labor.
3. Financial Relief and Bailout Packages
   • The government has explored various bailout packages to alleviate financial stress on private telcos like Vodafone Idea and Bharti Airtel. These include proposals to reduce spectrum usage charges, defer payment schedules for spectrum acquired at auctions, and reduce Universal Service Obligation Fund (USOF) contributions.
4. Investment Incentives and FDI Liberalization
   • 100% Foreign Direct Investment (FDI) under the automatic route in telecom aims to bring liquidity and encourage investment in new infrastructure including 5G networks. Production Linked Incentive (PLI) schemes with over ₹12,000 crore outlay support local manufacturing of telecom equipment.
5. Regulatory and Pricing Reforms
   • Policy discussions include rationalizing spectrum pricing, setting minimum floor tariffs for voice and data to ensure sector viability, and simplifying licensing and right-of-way approvals to lower operational costs and encourage investment.
6. Public Sector Strengthening and Universal Service Obligations
   • Strengthened support mechanisms for Universal Service Obligations through schemes like BharatNet aim to elevate rural broadband access and enhance last-mile connectivity, which broaden market opportunities for telcos.

Summary

The Indian government is actively supporting the telecom sector through direct financial aid, policy reforms, investment incentives, and infrastructure initiatives to help telcos tackle financial pressures, accelerate technology adoption (like 5G), and expand connectivity. This multifaceted approach seeks to sustain sector growth while addressing liquidity challenges faced by private and public operators alike.