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Telecommunications: March 2013

March, 2013

India is the second-largest telecommunications market in the world with 937.7 million subscribers as on September 2012. India is expected to feature among the top 10 broadband markets by 2013.

Indian telecom sector's revenue grew by 13.4 per cent to US$ 64.1 billion in FY12. Wireless and wireline revenue amounted to US$ 40.7 billion with a compound annual growth rate (CAGR) of 13.2 per cent over FY07-12; revenues from the telecom equipment segment in FY12 stood at US$ 23.5 billion as compared to US$ 23.4 billion in FY11.

The emergence of an affluent middle class is triggering demand for the mobile and internet segments. With 70 per cent of the population, staying in rural areas, the rural market will be a key growth driver in coming years.

The Government of India has allowed foreign direct investment (FDI) of up to 74 per cent in basic and cellular, unified access, national/international long distance, and V-Sat services as well as public mobile radio trucked services. FDI up to 100 per cent is permitted for infrastructure providers offering dark fibre, electronic mail and voice mail.

With the increasing number of wireless subscribers in India, telecom infrastructure is expected to grow at a CAGR of 20 per cent during 2008-15 to reach 571,000 towers in 2015. Further, the production of electronic and related equipment is also anticipated to reach US$ 52 billion by 2020, creating huge opportunities for private players.

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