The Telecom industry in India is the second-largest in the world with a subscriber base of over 1.2 bn.
The industry has witnessed exponential growth over the last few years primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers and a conducive regulatory environment.
Indian smartphone users consume maximum data in the world at 9.8 GB per month.
100% FDI is allowed in the Telecom, wherein upto 49% is allowed through the automatic route and beyond 49% under government route.
For further details, please refer FDI Policy
Contribution to India’s GDP
Total employment - (2017)
Rate of market penetration
No. of smart cities (2017)
Indian Mobile industry contributed over $ 140 bn to India's GDP in 2015
Digital India is expected to create $ 1 tn business opportunity by 2020
Number of internet users in India is expected to reach 829 mn by 2021
The Telecommunications industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.
According to a study by GSMA, smartphones are expected to account for two out of every three mobile connections globally, making India the fourth largest smartphone market by 2020. India is expected to lead in the growth of smartphone adoption globally with an estimated net addition of 350 mn by 2020.
Telecom tower in India is set to boom as its tenancy ration will increase from 1.95 times in 2016 to 2.9 times by 2020 due to the expansion of 3G and 4G and the onset of 5G technologies.
More than 60 companies have received approval from the Department of Telecommunications (DoT) in May 2017 to provide MVNO services; the majority of these companies are focused on Tier 2 and Tier 3 cities.
Chinese smartphone maker Vivo plans to invest INR 4,000 cr in India to setup a new manufacturing plant, and expand its existing functions.
The Department of Telecommunications (DoT) is in the final stages of approving the merger between Idea Cellular and Vodafone India, a development which will create India’s largest mobile phone operator and bring to an end a phase of rapid consolidation triggered by the entry of Reliance Jio.
Japan NEC to invest $ 10 mn in a New Centre of Excellence in Noida to develop Big Data and Analytics Solutions
Aadhar Pay, BHIM app, UPI to connect masses to provide banking interfaces, security and storage
OTT, digital content, e-banking, e-education, e-health, e-commerce
High data rates, low latency, high reliability and low energy consumption
Automation and data exchange with technologies including IoT, VR, AR and cloud computing
India ranked #2 start-up ecosystem in the world. Focus sectors: Fintech, Edtech, Enterprise tech & Healthtech
India Mobile Congress 2019
7th Telecom Convergence Summit, New Delhi, 6…
28th Convergence India Expo 2020
Union Budget Highlights 2019-20
Setting up Business in India
100% FDI is allowed in telecom sector (of this upto 49% is allowed through the automatic route and beyond 49% under government route).
Some incentives are:
a) Basic customs duty (BCD) and special additional duty have been withdrawn.
b) Importers of mobile handset components such as chargers, adaptors, batteries and wired handsets need to pay only the countervailing duty of 12.5%.
c) A duty advantage of 10.5% exists for local manufacturers of mobile speakers and batteries.
100% FDI is allowed in telecom sector. 49% is allowed through the automatic route. This is applicable in case of Basic, Cellular, Unified License (Access Services), Unified License, National/ International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Service (PMRTS), Global Mobile Personal Communications Services (GMPCS), all types of ISP licenses, Voice Mail/Audiotex/Unified Messaging Services (UMS), Resale of International Private Leased Circuits (IPLC), Mobile Number Portability Services, etc.
FDI in Telecom sector is subject to observance of licensing and security conditions by licensee as well as investors as notified by the Department of Telecommunications (DoT) from time to time, except ‘Other Service Providers’, which are allowed 100% FDI on the automatic route.
Deductions claimed on account of PSTN related call charges and roaming charges (Pass through charges/Interconnect Usage Charges) actually paid to eligible Telecom Service Providers and Sales Tax & Service Tax (if included in the Gross Revenue) actually paid to Government are admissible.
Inter-Company/Group Company transactions are those which occur between two separate legal entities e.g. transactions occurred between RCOM and RTL or transactions occurred between Vodafone Ltd and Vodafone South Ltd. are example of Inter-Company/Group Company transactions. Pass through charges between two legal entities may be routed through the bank only and not through mere ledger adjustment.
Whereas, Intra-Company/Group Company transactions are those which occur within same legal entity e.g. transactions occurred between RCOM, Delhi and RCOM UP (East) or transactions occurred between Vodafone South Ltd, AP and Vodafone South Ltd., Karnataka are example of intra-Company/Group Company transactions.
Please Note: Names of Companies used are for reference/illustration only.
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