Last Updated: September 23, 2016
Founder and Chairman, Foxconn
Last Updated: July, 2016
SECTORAL REPORT | September, 2016
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 is expected to contribute substantially to India’s Gross Domestic Product (GDP).
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.
The Indian telecommunication services market will likely grow by 10.3 per cent year-on-year to reach US$ 103.9 billion by 2020#.
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^.
Smartphone subscription in India is expected to increase four-fold to 810 million users by 2021, while the total smartphone traffic is expected to grow 15-fold to 4.5 exabytes (EB) per month by 2021###.
India' has the second largest mobile subscriber base in the world. According to Telecom Regulatory Authority of India (TRAI), the total telecom subscriber base in December 2015 stood at 1.04 billion, out of which 1.01 billion were mobile subscribers and 25.52 million were wireline subscribers.$
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. Total number of Fourth-Generation (4G) enabled smartphone shipments in India stood at 13.9 million units in the quarter ending December 2015, which was more than 50 per cent of total shipments, thereby surpassing number of Third-Generation (3G) enabled smartphone shipments for the first time. ^^
The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to GSMA.
India added the highest number of net mobile phone subscriptions of 21 million during the fourth quarter of 2015@.
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@@.
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$ 18.38 billion during the period April 2000 to March 2016, according to the data released by Department of Industrial Policy and Promotion (DIPP).
Some of the major developments in the recent past are:
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:
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$ 0.0148 as on July 11, 2016
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)
Notes: ^ - According to research firm IDC, ! - GSMA report 'The Mobile Economy: India 2015', @ - Ericsson Mobility Report February 2016, # - According to a report by leading research firm Market Research Store, ## - According to a study by the Associated Chambers of Commerce and Industry of India (Assocham), ### - According to the Ericsson Mobility Report India, @@ - as per research firm Gartner, $ -TRAI Telecom Subscription Report December 2015, ^^ - According to a report by International Data Corporation (IDC)
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: September 23, 2016
Founder and Chairman, Foxconn
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