Corruption will likely not tolerate such a free market without getting a slice of the pie, that's the biggest stumbling block.
Capitalism isn't a magic wand you can wave over things and have them fix themselves.
ANRC (the body that governs communication) in Romania I think did more (by doing very little) for the Romanian economy than any other government agency. It's funny because we used to hate them for not allowing us to get more ethernet cables on the public infrastructure (which we payed for a nominal price) because of some safety issues. I was working as and admin working for one of those free for all ISPs. It's crazy how good and cheep the internet has become since then.
What happened is that in a small city (250k people) we had about 30 independent ISPs and we had gigabit peering between ourselves. Scroll 5 years, big companies come in and buys us all out, then slowly start replacing ethernet with fiber. Scroll another 5-10 years, most have fiber in the cities and gigabit connections at very low prices.
It can be argued that the little guys (ISPs) got a little screwed especially those who haven't been bought, but overall the romanians got a really good internet and that's all that matters in the end.
The take away here is that once people started getting used to low-cost mostly local network + internet within a highly competitive environment, the "big" ISPs had no choice than to provide at least an equal service.
It's true, that was a different time, but now it's even better, because hardware is a lot faster and cheaper!
That's not the case in India.
Also, note that India is much larger and setting up a network is a much harder investment to make. If there's an oligopoly already active, they could simply not let new ISPs get a foothold unless you set up all the infrastructure on your own. And part of the problem of low internet usage is low internet connectivity in rural areas (which is probably less of a problem for Romania). That's not going to be solved by Facebook or market forces.