Telecom Industry in India

Market Size

With 512.26 million internet subscribers, as of June 2018, India ranks as the world’s second largest market in terms of total internet users.

Further, India is also the world’s second largest telecommunications market with 1,191.40 million subscribers, as of September 2018.

Moreover, in 2017, India surpassed USA to become the second largest market in terms of number of app downloads.

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.

Investment/Major development

With daily increasing subscriber base, there have been a lot of investments and developments in the sector. The industry has attracted FDI worth US$ 31.75 billion during the period April 2000 to June 2018, according to the data released by Department of Industrial Policy and Promotion (DIPP).

Some of the developments in the recent past are:

  • During the first quarter of 2018, India became the world’s fastest-growing market for mobile applications. The country remained as the world’s fastest growing market for Google Play downloads in the second and third quarter of 2018.
  • Bharti Airtel is planning to launch 6,000 new sites and 2,000 km of optical fiber in Gujarat in 2018-19.
  • The number of mobile wallet transaction increased 5 per cent month-on-month to 325.28 million in July 2018.
  • As of June 2018, BSNL is expected to launch its 5G services by 2020.
  • Vodafone India and Idea Cellular have merged into ‘Vodafone Idea’ to become India’s largest telecom company, as of September 2018.

Government Initiatives

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 other major initiatives taken by the government are as follows:

  • The Government of India is soon going to come out with a new National Telecom Policy 2018 in lieu of rapid technological advancement in the sector over the past few years. The policy has envisaged attracting investments worth US$ 100 billion in the sector by 2022.
  • The Department of Information Technology intends to set up over 1 million internet-enabled common service centres across India as per the National e-Governance Plan.
  • FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per cent, 49 per cent will be done through automatic route and the rest will be done through the FIPB approval route.
  • FDI of up to 100 per cent is permitted for infrastructure providers offering dark fibre, electronic mail and voice mail.
  • The Government of India has introduced Digital India programme under which all the sectors such as healthcare, retail, etc. will be connected through internet

Achievements

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

  • Department of Telecommunication launched ‘Tarang Sanchar’ – a web portal sharing information on mobile towers and EMF Emission Compliances.
  • Six-fold increase in Government spending on telecommunications infrastructure and services in 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) during 2014-19.
  • Over 75 per cent increase in internet coverage – from 251 million users to 446 million
  • Country-wide Optical Fibre Cable (OFC) coverage doubled – from 700,000 km to 1.4 million km
  • Five-fold jump in FDI inflows in the Telecom Sector – from US$ 1.3 Billion in 2015-16 to US$ 6.1 billion in 2017-18 (up to December 2017)

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Post time: Dec-26-2018
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