Telecommunication Market In India
Telecommunication Market In India
Currently, India is the world’s second-largest telecommunications
market with a subscriber base of 1.16 billion and has registered
strong growth in the last decade. The Indian mobile economy is
growing rapidly and will contribute substantially to India’s Gross
Domestic Product (GDP) according to a report prepared by GSM
Association (GSMA) in collaboration with Boston Consulting Group
(BCG). In 2019, India surpassed the US to become the second largest
market in terms of number of app downloads.
The liberal and reformist policies of the Government of India have
been instrumental along with strong consumer demand in the rapid
growth in the Indian telecom sector. The Government has enabled easy
market access to telecom equipment and a fair and proactive
regulatory framework, that has ensured availability of telecom
services to consumer at affordable prices. The deregulation of
Foreign Direct Investment (FDI) norms have made the sector one of
the fastest growing and the top five employment opportunity
generator in the country.
The total number of internet subscribers increased from 757.61
million in January 2021 to 765.09 million in February 2021. Of this
subscriber base, the number of wired internet subscribers was 22.26
million and wireless internet subscribers were 742.84 million.
India is also the world’s second-largest telecommunications market.
The total subscriber base in the country stood at 1187.9 million in
February 2021.
Gross revenue of the telecom sector stood at Rs. 68,228 crore in
the third quarter of FY21.
Over the next five years, rise in mobile-phone penetration and
decline in data costs will add 500 million new internet users in
India, creating opportunities for new businesses.
With daily increasing subscriber base, there have been a lot of
investment and development in the sector. FDI inflow into the
telecom sector during April 2000 – December 2020 totalled US$ 37.62
billion according to the data released by Department for Promotion
of Industry and Internal Trade (DPIIT).
In April 2021, Elon Musk’s SpaceX has started accepting pre-orders
for the beta version of its
Starlink satellite internet service in India for a fully
refundable deposit of US$ 99. Currently, Department of
Telecommunications (DoT) is screening the move and more developments
will be unveiled soon.
In March 2021, Vodafone Idea Ltd. (VIL) announced that the acquired
spectrum in five circles would help improve 4G coverage and
bandwidth, allowing it to offer ‘superior digital experience’ to
customers.
In March 2021, Advanced Television Systems Committee (ATSC) and
Telecommunications Standards Development Society, India (TSDSI)
signed a deal to boost adoption of ATSC standards in India in order
to make broadcast services available on mobile devices. This allows
the TSDSI to follow ATSC standards, fostering global digital
broadcasting standard harmonisation.
In December 2020, BSNL, in partnership with Skylotech India,
announced a breakthrough in satellite-based NB-IoT
(Narrowband-Internet of Things) for fishermen, farmers,
construction, mining and logistics enterprises.
In the first quarter of FY21, customer spending on telecom services
increased 16.6% y-o-y, with over three-fourths spent on data
services. This spike in consumer spending came despite of the
COVID-19 disruption and lack of access of offline recharges for a
few weeks
India had over 500 million active internet users (accessed Internet
in the last one month) as of May 2020.
In June 2020, Jio Platforms Ltd. sold 22.38% stake worth Rs 1.04
trillion to ten global investors in a span of eight weeks under
separate deals, involving Facebook, Silver Lake, Vista, General
Atlantic, Mubadala, Abu Dhabi Investment Authority (ADIA), TPG
Capital and L. Catterton. This is the largest continuous fundraise
by any company in the world.
The Government has fast-tracked reforms in the telecom sector and
continues to be proactive in providing room for growth for telecom
companies. Some of the key initiatives taken by the Government are
as follows:
The Rs. 12,195 crore production-linked incentive (PLI) scheme or
telecome is expected to bring in investment of around Rs. 3,000
crore and generate huge direct and indirect employment.
In April 2021, the government pointed out that firms such as
Ericsson and Nokia are now eager to expand their operations in
India, and global companies like Samsung, Cisco, Ciena and Foxconn
have expressed interest to set up their manufacturing base in the
country for telecom and networking products.
In March 2021, TEPC (Telecom Equipment Export Promotion Council)
organised India Telecom 2021—a platform for convergence of
technologies and business exchange.
The Union Cabinet approved Rs. 12,195 crore production-linked
incentive (PLI) schemes for telecom & networking products under
the Department of Telecom.
In 2021-22, the Department of Telecommunications has been allocated
Rs. 58,737.00 crore (US$ 8 billion). 56% allocation is towards
revenue expenditure and the remaining 44% is towards capital
expenditure.
Under Union Budget 2021-22, the government allocated Rs. 14,200
crore for telecom infrastructure that entails completion of optical
fibre cable-based network for Defence services, rolling out
broadband in 2.2 lakh panchayats and improving mobile services in
the North East.
On January 15, 2021, India and Japan signed an MoU to enhance
cooperation in the field of Information and Communications
Technologies. The MoU was signed between the Union Minister for
Communications, Electronics and IT, Ravi Shankar Prasad, and the
Japanese Minister for Internal Affairs and Communications, Takeda
Ryota.
On January 6, 2021, the Department of Telecommunications (DoT)
issued Notice Inviting Applications (NIA) for auction of Spectrum in
700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500
MHz bands. Last date for submission of applications for
participation in the auction is February 5, 2021, and auction to
commence online from March 1, 2021.
In December 2020, the Union Cabinet, chaired by the Prime Minister,
Mr. Narendra Modi, approved a proposal by Department of
Telecommunications for setting up of Public Wi-Fi Networks by Public
Data Office Aggregators (PDOAs) to provide public Wi-Fi services
through Public Data Offices (PDOs).
In December 2020, the Union Cabinet, chaired by the Prime Minister,
Mr. Narendra Modi, approved the provision of submarine optical fibre
cable connectivity between Mainland (Kochi) and Lakshadweep Islands
(KLI Project).
On November 4, 2020, The Union Cabinet, chaired by the Prime
Minister, Mr. Narendra Modi, approved to sign a Memorandum of
Understanding (MoU) between the Ministry of Communication and
Information Technology and the Department of Digital, Culture, Media
and Sports (DCMS) of United Kingdom Government on cooperation in the
field of telecommunications/information and communication
technologies (ICTs).
On September 21, 2020, Prime Minister, Mr. Narendra Modi launched a
project to connect all 45,945 villages in Bihar with optical fibre
internet service. This project will be completed by March 31, 2021
at a cost of Rs. 1,000 crore, Rs. 640 crore of capital expenditure
will be funded by Department of Telecommunications.
In March 2020, the government approved the Production Incentive
Scheme (PLI) for Large- scale Electronics Manufacturing. The scheme
proposes production-linked incentive to boost domestic manufacturing
and attract large investments in mobile phone manufacturing and
specified electronic components including Assembly, Testing, Marking
and Packaging (ATMP) units.
FDI cap in the telecom sector has been increased to 100% from 74%;
out of 100%, 49% will be done through the automatic route and the
rest will be done through the FIPB approval route. FDI of up to 100%
is permitted for infrastructure providers offering dark fibre,
electronic mail and voice mail.
Department of Telecommunication launched ‘Tarang Sanchar’ - a web
portal sharing information on mobile towers and EMF Emission
Compliances.
Payments on unified payments interface (UPI) hit an all-time high
of 2.30 billion (by volume), with transactions worth Rs. 4.31 lakh
crore in January 2021.
Over 75% increase in internet coverage from 251 million users to
446 million.
Revenue from the telecom equipment sector is expected to grow to
US$ 26.38 billion by 2020. The number of internet subscribers in the
country is expected to double by 2021 to 829 million and overall IP
traffic is expected to grow four-fold at a CAGR of 30% by 2021.
According to a Zenith Media survey, India is expected to become the
fastest-growing telecom advertisement market, with an annual growth
rate of 11% between 2020 and 2023.
The Indian Government is planning to develop 100 smart city
projects, and IoT will play a vital role in developing these cities.
The National Digital Communications Policy 2018 envisaged attracting
investment worth US$ 100 billion in the telecommunications sector by
2022. App downloads in India is expected to increase to 18.11
billion in 2018F and 37.21 billion in 2022F.
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