India is the world's second-largest telecommunications market, with over 1.0 billion subscribers as of May 2015. The wireless segment (97.36 per cent of total telephone subscriptions) dominates the market. It has also been growing at a brisk pace. During FY07-15, wireless subscriptions witnessed a CAGR of 24.78 per cent to 969.8 million. . It is also the second largest country in terms of internet subscribers. India had 267.39 million internet subscriptions as of December 2014.
India’s telecommunications market is expected to experience further growth, fuelled by increased non-voice revenues and higher penetration in rural market. Telecom penetration in the nation's rural market is expected to increase from 46.14 per cent as of December 2014 to 70 per cent by 2017. The emergence of an affluent middle class is triggering demand for the mobile and internet segments. Availability of affordable smartphones, along with a rise in the security level of mobile transactions, is expected to boost growth of transactions conducted via phones, with the overall transaction value being tripled in 2014 from last year.
Strong policy support from the government has been crucial to the sector’s development. FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent. In January 2015, the Government of India recommended reduction in license fees of telecom by 6 per cent for operators; telecom operators currently pay 8 per cent of adjusted gross revenue as licence fee.