Indian Economy News

5G, satcoms, semiconductors will jointly contribute with US$ 240 billion to boost the Indian economy by FY28: KPMG

  • IBEF
  • October 30, 2023

According to a KPMG report, 5G, satellite communication, and semiconductors will jointly contribute around US$ 240 billion to India's economy over the next five years, accounting for 1.6% of the national GDP by FY28.

According to KPMG research issued at the ongoing seventh edition of the India Mobile Congress, India is preparing for a significant transformation to become a global digital powerhouse as the three technologies utilize important national strengths, namely the economy, technology, demography, and demand.

The telecoms industry is presently worth Rs. 3 lakh crore (US$ 36.03 billion) and is predicted to develop at a compound annual growth rate (CAGR) of around 7-9% by FY24.

According to the report, “There will be nearly a 40% increase in hiring in the telecom and related industries in the coming years. The rollout of 5G/6G will boost job prospects in the telecom sector”.

Presently, the telecommunications industry employs around 4 million people, with 2.2 million working directly and 1.8 million working indirectly. According to the report, employment is expected to exceed 6 million by FY26 due to the continuous usage of cutting-edge technologies such as the Internet of Things, 5G/6G, and virtual network operations.

The country also has one of the highest per capita data usage numbers in the world. Indian internet users utilize an average of 19.5 GB of data each month, with 4G accounting for 99% of all data traffic.

An increase in Over-The-Top content watching, a rapid fall in data cost over the years, and an increase in remote work opportunities and online education have all contributed to this spike in data traffic. Indians are predicted to consume 62 GB of data per month by 2028. According to the study, rural smartphone ownership has more than doubled between the pre-Covid era and 2023.

While 358 million of India's 759 million internet users live in rural regions, rural internet penetration in India is expected to reach 56% by 2025.

The report identified examples of permitting spectrum usage without auction, such as in Germany, where certain bands of frequencies are classified as 'generic assignments' for use by the public or specialized groups.

The government is in the process of identifying new bands to include in that round, and a consultation with the Telecom Regulatory Authority of India is expected soon.

According to the report, “For 5G, Germany has opted to allocate 5G spectrum to telecom providers on a rolling basis, prioritizing rapid service deployment over short-term revenue maximization”.

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