According to a study by GSMA, India is all set to become the fourth largest smartphone market by 2020.

Telecom Sector in India

Latest update: September, 2015

Telecom subscriber base expands substantially

•India is currently the second-largest telecommunication market and has the third highest number of internet users in the world 

•India's telephone subscriber base expanded at a CAGR of 19.22 per cent to 1,002 million over FY07–15 

•Teledensity (defined as the number of telephone connections for every hundred individuals) increased from 18.3 in FY2007 to 79.67 in FY 2015nbsp;

•In May 2015, total telephone subscription stood at 1,002 million, while teledensity was at 79.67nbsp;


Wireless segment dominates the market

•India's telephone subscriber base reached 1,002 million in May, 2015

•The wireless segment (97.36 per cent of total telephone subscriptions) dominates the market, while the wireline segment accounts for the rest

•Urban regions account for 55.76 per cent of telecom subscriptions, while rural areas constitute the remaining


Last Updated: September, 2015

SECTORAL REPORT | August, 2015


India is currently the world’s second-largest telecommunications market and has registered strong growth in the past decade and half. The Indian mobile economy is growing rapidly and will contribute substantially to India’s gross domestic product (GDP), according to report prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group (BCG).

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 has made the sector one of the fastest growing and a top five employment opportunity generator in the country.

Market Size

Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according to research firm IDC.

According to a study by GSMA, smartphones are expected to account for two out of every three mobile connections globally by 2020 making India the fourth largest smartphone market.

The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to GSMA.

India saw the fastest growth in new mobile-phone connections with 18 million net additions in the third quarter of 2014, followed by China with 12 million new additions, according to a report by Swedish mobile network equipment maker Ericsson.

International Data Corporation (IDC) predicts India to overtake US as the second-largest smartphone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smartphones and gradually upgrade to 4G.

In spite of only 5 per cent increase in mobile connections in 2015, overall expenditure on mobile services in India is expected to increase to US$ 21.4 billion in 2015, led by 15 per cent growth in data services expenditure, as per research firm Gartner.

The Indian telecom sector is expected to generate four million direct and indirect jobs over the next five years according to estimates by Randstad India. The employment opportunities are expected to be created due to combination of government’s efforts to increase penetration in rural areas and the rapid increase in smartphone sales and rising internet usage.


With daily increasing subscriber base, there have been a lot of investments and developments in the sector. The industry has attracted FDI worth US$ 17,058.03 million during the period April 2000 to March 2015, according to the data released by Department of Industrial Policy and Promotion (DIPP).

Some of the major developments in the recent past are:

Government Initiatives       

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

  • With a view to encourage consolidation in the telecom sector, the Government of India has approved the rules for spectrum trading that will allow telecom companies to buy and sell rights to unused spectrum among themselves. The Union Cabinet chaired by the Prime Minister, Mr Narendra Modi, gave its approval to the guidelines on spectrum sharing, aimed to improve spectral efficiency and quality of service, based on the recommendations of the Telecom Regulatory Authority of India (TRAI).
  • The Central Government’s several initiatives to promote manufacturing in the country, such as ‘Make in India’ campaign appears to have had a positive impact on mobile handsets manufacturing in the country. Companies like Samsung, Micromax and Spice had been assembling handsets in the country already. Xiaomi and Motorola, along with Lenovo have also started assembly of smartphones in India. Firms like HTC, Asus and Gionee too have shown interest in setting up a manufacturing base in the country.
  • The Government of India plans to roll out free high-speed wi-fi in 2,500 cities and towns across the country over the next three years. The program entails an investment of up to Rs 7,000 crore (US$ 1.06 billion) and will be implemented by state-owned Bharat Sanchar Nigam Ltd (BSNL).

Road Ahead

India will emerge as a leading player in the virtual world by having 700 million internet users of the 4.7 billion global users by 2025, as per a Microsoft report. With the government’s favourable regulation policies and 4G services hitting the market, the Indian telecommunication sector is expected to witness fast growth in the next few years.

Exchange Rate Used: INR 1 = US$ 0.0152 as on September 16, 2015

References: Media Reports and Press Releases, Cellular Operators Authority of India (COAI), Telecom Regulatory Authority of India (TRAI), Department of Telecommunication (DoT), Department of Industrial Policy and Promotion (DIPP)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


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