Indian Telecom Sector Overview

India is currently the world’s second-largest telecommunications market with a subscriber base of 1.05 billion and has registered strong growth in the past decade and a half. The Indian mobile economy is growing rapidly and will contribute substantially to India’s Gross Domestic Product (GDP), according to report prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group (BCG). The country is the fourth largest app economy in the world.

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 the 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 industry has attracted FDI worth US$ 30.03 billion during the period April 2000 to September 2017, according to the data released by Department of Industrial Policy and Promotion (DIPP).

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. ( Most probably indirect as The competition among telecom operators and Mergers and Acquisitions making the sector difficult to generate direct employment. Payment banks and Tower business may change the fate of sector). The employment opportunities are expected to be created due to the combination of government’s efforts to increase penetration in rural areas and the rapid increase in smartphone sales and rising internet usage.

Data usage on Indian telecom operators’ networks (excluding Reliance Jio), doubled in six months to 359 petabytes or 3.7 million gigabytes per month as 4G data usage share increased to 34 percent by the end of June 2017$. According to a report by leading research firm Market Research Store, the Indian telecommunication services market will likely grow by 10.3 percent year-on-year to reach US$ 103.9 billion by 2020.

The Government of India is working to digitally connect the rural and remote regions in the country and has decided a new affordable tariff structure with the principle of more you use, less you pay. The changes will soon be reflected in tariff changes by service providers in the country.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter