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Indian Telecom Industry Analysis

August, 2019

(1) India is the world's second-largest telecommunications market, with around 1,183.53 million telephone subscriber bases at the end of May 2019. The telecom market can be split into three segments – wireless, wireline and internet services. The wireless market segment comprises of 89.92 per cent of the total subscriber base, as of May 2019 compared to 95.90 per cent in FY11. As of May 2019, rural subscribers form 42.9 per cent of total telephone subscribers and in April 2019 43.33 per cent, compared to 33.35 per cent in FY11.

India is also the second largest country in terms of internet subscribers. The number of internet subscribers in the country increased at a CAGR of 41.58 per cent during FY06-FY18 to reach 636.73 million in 2018-19. India became the world’s fastest-growing market for mobile applications in the first quarter of 2018 and remained as the world’s fastest growing market for Google Play downloads in the second and third quarter of 2018. The internet user base in India has crossed 500 million mark and is likely to reach 627 million by end 2019. Total wireless data usage in India grew 119 per cent year-on-year to 1,58,50,560 terabytes between January-March 2019.

Gross revenue of the telecom sector stood at Rs 2,37,416.6 crore (US$ 33.97 billion) in 2018-19.

Strong policy support from the government has been crucial to the sector’s development. Foreign Direct Investment (FDI) cap in the telecom sector has been increased to 100 per cent from 74 per cent. FDI inflows into the telecom sector during April 2000 – March 2019 totalled to Rs 2.29 lakh crore (US$ 32.82 billion). As of January 2019, expenditure on telecom infrastructure and services by Government of India grew six-fold to Rs 60,000 crore (US$ 8.31 billion) between 2014-19.

To propel the sector on a growth path, the Government of India has launched the National Digital Communications Policy, 2018, which envisages attracting investments worth US$ 100 billion in the telecommunications sector by 2022.

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