Indian mobile industry is at the cross-roads now. After growing at a fast pace in the last couple of years, the subscriber addition has declined significantly and the operator revenues are not growing. The interest of foreign players is waning and some of the operators are now in the process of shutting down their operations. The article would not only give an overview of the industry but would also delve into the reasons for the decline in the fortunes of this industry. Indian telecom industry has been hailed as the proof of India’s progress post liberalization. The country actually leapfrogged to the mobile platform bypassing the fixed line. Since in India, the fixed line subscribers are not even 5% of the mobile subscriber base, in this article, I am going to talk about mobile subscribers and its market only. The country was divided into 23 circles when the mobile phones were introduced in the country. Separate licenses were given out for each of the circles in 1994. The circles were classified as Metros, A, B or C depending upon the revenue potential for the circle with Metros & A circles expected to have the highest potential. The mobile operators brought in a lot of innovations like outsourcing of networks, focus on prepaid, etc. to make the mobile services affordable to the masses. As a result, the prices declined significantly over the years and the base continued to increase. The chart below gives a good overview of the various events in the industry over the years and the impact of the events on the adoption of the services.

Till 2009, the number of operators was around 5-6 per circle which meant that there was enough competition to keep the prices down but there still some sanity in terms of profitable growth. The EBITDA levels till 2009 were almost 40%. However, in 2008, the Government issued licenses to 8 new operators taking the number of