Telecom Equipment & Infra Services Sector Analysis: A Deep Dive Into India'S Digital And Energy Transition

The Telecom Equipment & Infra Services sector in India is undergoing a transformative phase, characterized by aggressive 5G rollouts, burgeoning data consumption, strategic government initiatives, and a burgeoning focus on indigenous manufacturing and sustainable energy solutions. This comprehensive analysis synthesizes insights from leading players like Indus Towers Limited, HFCL Limited, Tejas Networks Limited, Pace Digitek Limited, and SAR Televenture Limited, offering a holistic view of the industry's market dynamics, financial health, competitive landscape, operational efficiencies, growth drivers, and future outlook. The sector is not merely expanding its traditional telecom footprint but is also strategically diversifying into adjacent high-growth areas such as defense communications, enterprise broadband, and renewable energy storage solutions, positioning itself at the forefront of India's digital and energy transition.

A. Industry Overview & Market Landscape

The Indian telecom equipment and infrastructure services sector is a vibrant and rapidly evolving ecosystem, driven by an insatiable demand for connectivity and data. The market is characterized by significant investments in next-generation technologies like 5G and fiber optics, supported by robust government backing for indigenous manufacturing and digital inclusion.

Total Addressable Market Size and Growth Rates: The global wireless and wireline segments represent a substantial annual opportunity, estimated at upwards of $25 billion to$30 billion (approximately INR 2 lakh crores), as highlighted by Tejas Networks. India, as one of the fastest-growing telecom markets globally, is a significant contributor to this market and is poised for continued expansion. The total 5G base stations in India have already crossed the 500,000 mark, indicating the rapid pace of network deployment. The 5G subscription base in India is projected to exceed 322 million by the end of June 2025, having grown by a remarkable 77 million in Q1 FY26 alone. This rapid adoption of 5G is a primary catalyst for infrastructure demand.

Data consumption is a critical growth metric, with total data consumption in India growing by 16% quarter-on-quarter for the period ending June 2025. The average monthly data usage per user also saw a 13% quarter-on-quarter increase during the same period. More specifically, 5G usage alone surged by 17% quarter-on-quarter in Q1 FY26, now accounting for a significant 32% of total data traffic, up from 30% in Q4 FY25. This ongoing surge in network traffic unequivocally reinforces the need for deeper coverage and higher capacity infrastructure. HFCL projects that data traffic in India is expected to grow at a Compound Annual Growth Rate (CAGR) of approximately 22.39% over the next five years, underscoring the sustained demand for telecom infrastructure.

Market Structure and Segmentation: The sector can be broadly segmented by the type of services and products offered:

1. Telecom Infrastructure Providers (TowerCos): Companies like Indus Towers and SAR Televenture primarily focus on building, owning, and operating passive telecom infrastructure (towers) and leasing space on these towers to mobile network operators.

   • Indus Towers is an industry leader, boasting a total macro tower base of around 256,000 (an 11.5% year-on-year growth) and a total co-location base of around 415,000 (a 9.6% year-on-year growth) as of Q2 FY26. Its industry-leading tenancy ratio stands at a stable 1.62.
   • SAR Televenture is also an Infrastructure Provider Category I (IP-I) with DoT, actively involved in tower infrastructure, having completed 1,200 4G/5G Telecom Infrastructure Towers and signing Master Service Agreements (MSAs) with three major Telcos for a tower sharing model.

2. Telecom Equipment Manufacturers: Companies like HFCL and Tejas Networks specialize in designing, developing, and manufacturing active and passive telecom equipment.

   • HFCL is a leading player in Optical Fiber Cable (OFC) manufacturing, positioned as the #1 OFC Supplier in India. It also manufactures telecom and network equipment. Its product-led revenue share was 58% in H1 FY26.
   • Tejas Networks focuses on indigenous 4G/5G RAN products, IP/MPLS routers, DWDM transmission products, and PON solutions. It is notable for contributing to India becoming the fifth country in the world to have a complete 4G/5G technology stack (via the BSNL network deployment).

3. Integrated Network Solutions & EPC/O&M Providers: Companies like Pace Digitek and SAR Televenture offer end-to-end solutions, including EPC (Engineering, Procurement, and Construction), O&M (Operations & Maintenance), and diversified services.

   • Pace Digitek provides diversified infrastruc