India’s telecommunications industry reported strong activity during 2018 with steady capacity expansion helping onboard subscribers like never before. A six-fold increase in Government spending on telecom infrastructure and services across the country to US$8.4 billion between 2014-19 has helped with this growth. Hence, India has emerged as the world’s second-largest telecom market with a subscriber base of 1.2 billion. Meanwhile, average voice tariff declined by 67 per cent and average data tariff dropped by 96 per cent during the period. The favourable metrics have opened up new opportunities covering retail activities to content creation. The Government has also sought to employ improved transparency in the auction of spectrum that has further encouraged activity in the telecom space, while bringing in revenue worth over US$9.1 billion.
India has emerged as the world’s second-largest telecom market with a subscriber base of 1.2 billion
Biggest milestones in the telecoms space:
- Increase in overall teledensity in the country – from 75 per cent in June 2014 to 93 per cent in March 2018, adding 305 million new subscribers
- Mobile internet subscriptions, backed by rising smartphone uptake, more than doubled from 233 Million in March 2014 to 491 Million in June 2018
- More than 107 per cent increase in internet coverage – from 251 million users in June 2014 to 512 million in June 2018, aiding business expansion
- Number of mobile base transceiver stations (BTS) more than doubled from 790,000 in May 2014 to over 2 million in May 2018, improving connectivity
- Country-wide optical fibre cable coverage doubled from 700,000 km in May 2014 to 1.4 million km in May 2018, strengthening network expansion
- Average mobile data usage per subscriber grew 51 times – from 62 MB per month to 3.2 GB per month, cheaper mobile devices has aided the growth
- Cheapest data tariff globally – from Rs. 300 per GB in 2014 to Rs. 12 per GB in June 2018, tariff reduction of 96 per cent has driven the strong uptake
- Seven times growth in broadband access – from 61 million subscribers in March 2014 to 447 million subscribers in June 2018 has helped e-governance
- Digital payment transactions through mobile grew four times – from 168 million in November 2016 to 600 million currently, aiding the fintech sector
- Five times jump in FDI inflows in telecom sector – from US$1.3 billion in 2015-16, to US$6.2 billion in 2017-18, owing to the sector’s promises
Connecting India’s unconnected areas:
- Extremism affected areas – 2,335 mobile towers installed in Phase I, at a total outlay of over US$667 million; 4,072 towers approved for installation in Phase II, with a total outlay of over US$1 billion
- Biggest ever telecom spend in the northeast region – ongoing projects with total outlay of more than US$1.5 billion, connecting border areas, highways, and unconnected villages to support growth
- Submarine cable connectivity to Andaman and Nicobar Islands from Chennai, in addition to strengthening connectivity with Lakshadweep for over US$314 million under efforts of the Islands Development Agency
- Steady expansion of the WiFi ecosystem in rural areas, with an outlay of US$1.4 billion, has launched more than 32,000 BSNL hotspots. Additional 1 million hotspots have been planned by March 2019
Key reforms in the telecom space
- Spectrum sharing and trading allowed – to boost competition
- Spectrum harmonisation – to free up spectrum for auction
- Sharing of passive (fibre, towers) and active (BTS) infrastructure
- Deferred Payment Liabilities – to reduce financial stress in sector
- Easing of Right of Way Rules and Charges – Ease of Doing Business
- Full mobile number portability to benefit telecom consumers
- Virtual Network Operators license to aid infrastructure utilisation
- Input credit for VNO licensees allowed to ease tax burden
The National Digital Communications Policy (NDCP) 2018:
- Connect India – Universal broadband coverage at 50 Mbps; Propel India – Attracting new investments worth US$100 billion; Secure India – Strong telecom infrastructure to protect data
- NDCP 2018 aims to provide broadband to all by 2022; Adding 4 million jobs, focussing on new technologies: Digital Communications to grow to 8 per cent of GDP by 2022 from 6 per cent
- To bring India to top 50 rank on the ICT Development Index of the International Telecom Union, from the current present 134; Net positive international trade in telecom through lower imports
The telecom sector plays a key role in supporting agriculture, poverty eradication, disaster preparedness and financial inclusion. India, driven by stable economic growth, has come up as a fast-growing market for internet adoption and smartphone uptake. Meanwhile, Digital India policy is seeking to bring most government services online. This has not only alleviated vast developmental issues such as those related to education, connectivity, healthcare, banking, but also provided rich investment opportunities. Amid this growth, the upcoming National Telecom Policy 2018 has envisaged attracting investments worth US$100 billion in the telecom sector by 2022. Fast adoption of new technologies such as 5G, AI, ML, IoT, robotics, blockchain and cloud computing in India’s information and communications technology space has further strengthened opportunities.
