In FY 2019-20 between April-September 2019, the Gross revenue of the telecom sector stood at Rs 121,527 crore (US$ 17.39 billion).

Currently, India is the world’s second-largest telecommunications market. It has a subscriber base of 1.20 billion and it has registered strong growth within the past decade and a half. The Indian mobile economy is growing rapidly and contributes substantially to India’s Gross Domestic Product (GDP), according to a report prepared by GSM Association (GSMA) in conjunction with the Boston Consulting Group (BCG). As of January 2019, India has witnessed a 165 per cent growth in app downloads within the past two years and 4.8 billion downloads of mobile applications were registered in India in first three months of 2019.

The liberal and reformist policies of the govt of India are instrumental along with the strong consumer demand within the rapid climb in the Indian telecom sector. The government ensured active affordable pans to its customers. The deregulation of Foreign Direct Investment (FDI) norms has made the telecom sector one among the fastest growing and top five employment opportunity generator within the country.

Market Size

India ranks the world’s second-largest market in terms of total internet users. The number of internet subscribers within the country increased at a CAGR of 45.74 per cent during FY06-FY19 to succeed in 636.73 million in 2018-19. Till September 2019, the internet subscribers reached 687.62 million. Between July-September 2019, the total wireless data usage in India grew 10.58 percent year-on-year to 19,838,886 terabytes.

As on December 2019, India is additionally the world’s second-largest telecommunications market, total telephone subscriber base and tele-density reached 1,172.44 million and 88.56 percent. 

In FY20 between April-September 2019, the Gross revenue of the telecom sector stood at Rs 121,527 crore (US$ 17.39 billion).

Over the subsequent five years, the rise in mobile-phone penetration and a decline in data costs will add 500 million new internet users in India, creating opportunities for brand fresh businesses.

Investment/Major development

With a daily increasing subscriber base, there are tons of investments and developments within the sector. FDI inflows totaled US$ 37.11 billion from April 2000 – December 2019 for the telecom sector, according to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT).

Some of the developments within the recent past are:

  • As of January 2020, a total of 542 banks are permitted to supply mobile banking services in India.
  • In December 2019, Airtel disclosed its plans to take a position of US$ 2.86 billion in its business as a neighborhood of the company’s annual target.
  • As per a report by Ericsson, India has the world’s highest data usage per smartphone at a mean of 9.8 GB per month.
  • As of August 2019, Jio's IoT platform is prepared to be commercially available from January 2020.
  • In August 2019, Jio GigaFiber commercially launched as wired broadband service.
  • During the primary quarter of 2018, India became the world’s fastest-growing marketplace for mobile applications. The country is the world’s fastest-growing marketplace for Google Play downloads within the second and third quarter of 2018. 
  • Bharti Airtel is getting to launch 6,000 new sites and a couple of thousand km of glass fiber in Gujarat in 2018-19.
  • As of September 2018, Vodafone India and Idea Cellular have merged into ‘Vodafone Idea’ to become India’s largest telecom company.
Government Initiatives

The government has fast-tracked reforms within the telecom sector and continues to be proactive in providing room for growth for telecom companies. Some of the major initiatives taken by the govt are as follows:

  • In January 2020, 100 percent FDI was allowed by the Government of India in Bharti Airtel.
  • By March 2020, the govt. aims to understand 45 billion digital transactions for banks with the help of POS machines, transactions enabled and merchants, which are added in firms. As of January 2020, quite 542 banks are permitted to supply mobile banking services in India.
  • The Government of India is soon going to begin with a replacement National Telecom Policy 2018 in lieu of rapid technological advancement within the world over the past few years. The policy has envisaged attracting investments worth US$ 100 billion within the sector by 2022.
  • The Department of knowledge Technology intends to line up over 1 million internet-enabled common service centres across India as per the National e-Governance Plan.
  • FDI cap within the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per cent, 49 per cent are going to be done through automatic route and therefore the rest are going to be done through the FIPB approval route.
  • FDI of up to 100 per cent is permitted for infrastructure providers offering dark fibre, electronic message and voice mail.
  • the govt of India has introduced Digital India programme under which all the sectors like healthcare, retail, etc. will be connected through internet

Following are the achievements of the government in the past four years:

  • Department of Telecommunication launched ‘Tarang Sanchar’ - an internet portal sharing information on mobile towers and EMF Emission Compliances.
  • In October 2019, Value of Unified Payments Interface (UPI) transactions crossed 1 billion-mark and witnessed a transaction value of Rs 1.91 lakh crore (US$ 27.33 billion).
  • As of July 2019, India has achieved 100 percent digitization of cable TV networks.
  • During 2014-19, Six-fold increase in Government spending on telecommunications infrastructure and services within the country – from Rs 9,900 crores (US$ 1.41 billion) during 2009-14 to Rs 60,000 crores (US$ 8.55 billion) (actual + planned).
  • Increase in internet coverage – from 251 million users to 446 million which is over 75 percent overall.
  • Country-wide optical fiber Cable (OFC) coverage doubled – from 700,000 km to 1.4 million km
Course of action

Revenues from the telecommunication system sector are expected to grow to US$ 26.38 billion by 2020. The number of internet subscribers within the country is predicted to double by 2021 to 829 million and overall IP traffic is predicted to grow 4-fold at a CAGR of 30 percent by 2021. The Indian Government is getting to develop 100 smart city projects, where IoT would play an important role in the development of these cities. Within the telecommunications sector, the National Digital Communications Policy 2018 has envisaged attracting investments worth US$ 100 billion by 2022. The Indian Mobile Value-Added Services (MVAS) industry is expected to grow at a CAGR of 18.3 percent during the forecast period 2015–2020 and reach US$ 23.8 billion by 2020. App downloads in India are expected to extend to 18.11 billion in 2018F and 37.21 billion in 2022F.

Edited by Dhivya A

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