Snapshot

Connecting the World

The Telecom industry in India is the second largest in the world with a subscriber base of 1.091 Bn as of Mar 2024 (wireless + wireline subscribers). India has an overall tele-density of 85.69%, of which, the tele-density of the rural market, which is largely untapped, stands at 59.19% while the tele-density of the urban market is 133.72 %.

By the end of Sept 2023, the total number of internet subscribers increased to 918.19 Mn (narrowband + broadband subscribers), out of which 40.91% of the internet subscribers belonged to the rural areas. The average monthly data consumption per wireless data subscriber has also increased to 17.36 GB GB in Mar 2023 from 61.66 MB in Mar 2014.

The industry’s exponential growth over the last few years is primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers, Government’s initiatives towards bolstering India’s domestic telecom manufacturing capacity, and a conducive regulatory environment.

To further expedite digital connectivity, the Government has approved the auction of IMT/5G spectrum for deployment of 5G services within the country. This auction was successfully held by the end of Jul 2022 and grossed $18.77 Bn.

The Telecom sector is the 4th largest sector in terms of FDI inflows, contributing 6% of total FDI inflow, and contributes directly to 2.2 Mn employment and indirectly to 1.8 Mn jobs. Between 2014 and 2021, the FDI inflows in the Telecom sector rose by 150% to $20.72 Bn from $8.32 Bn during 2002-2014. 100% Foreign Direct Investment (FDI) has now been allowed in the Telecom

For further FDI details, please refer to FDI Policy read with Press Note. 4

  • Mn

    Broadband Connections (as on 31st Mar 2024)

  • Mn

    Total employment

  • Mn+

    User Base of 5G

  • No. of smart cities

India currently has the world’s second-largest subscriber base of 1.09 Bn.

Active internet users in India are more than 900 Mn.

India is aiming to manufacture mobile phones worth $126 Bn by 2025-26.

Industry Scenario

Tele-density, which denotes the number of telephones per 100 population, is an important indicator of telecom penetration.

The Telecommunications industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.

As per GSMA, India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 Bn installed devices and is expected to have 920 Mn unique mobile subscribers by 2025 which will include 88 Mn 5G connections. It is also estimated that 5G technology will contribute approximately $450 Bn to the Indian Economy in the period of 2023-2040. 

India added over 500 Mn new smartphone users over the last decade. We are expected to have 850 Mn smartphone users by 2026, representing ~55% of the total population.  

Under the Union Budget 2023, The Government of India plans to set up one hundred labs for developing applications using 5G services in engineering institutions to realize a new range of opportunities, business models, and employment potential.

The DoT is targeting a combination of 100% broadband connectivity in the villages, 70% fiberisation of towers, average broadband speeds of 50 Mbps and 50 Lakh kms of optic fibre rollouts at a pan-India level by Dec 2024. Broadband connections rose to 924.07 Mn in Mar 2024 from 61 Mn in Mar 2014, growing by 1414%. 

  • India is placed at 60th rank as per Network Readiness Index 2023
  • India secures 2nd rank in “Mobile broadband internet traffic within the country” and “International Internet bandwidth”.
  • Internet connections jumped from 25.15 Cr in Mar 2014 to over 91 Cr in Mar 2023.
  • Average revenue realization per subscriber per GB wireless data reduced to INR 9.94 in March, 2023 from INR 268.97 in December 2014, a reduction of more than 96.30%.
  • India secures 3rd rank in “Annual investment in telecommunication services” and “Domestic market size”.
  • 5G network has been rolled out in all 28 states and 8 UTs.
  • India, in terms of median mobile broadband speed, has reached 43rd position.  
  • Total telephone connections rose to 1199.28 Mn in Mar 2024 from 933 Mn in Mar 2014, with a growth of 28.54 % in the said period. The number of MNP requests submitted were 11.44 Mn in Mar 2024.
  • Urban telephone connections rose to 665.38 Mn in Mar 2024 from 555.2 Mn in Mar 2014, a growth of 19.8% while the growth in rural telephone connections was 41.31%, which is double of urban increase, rising from 377.8 Mn in Mar 2014 to 533.9 Mn in Mar 2024. The rural tele-density jumped from 44% in Mar 2014 to 59.19% in Mar 2024.

GROWTH DRIVERS

  • PLI Schemes under Atmanirbhar Bharat Abhiyan

    Production Linked Incentive (PLI) Scheme worth INR 12,195 Cr for manufacturing of telecom and networking products. Incentives worth more than INR 4,000 Cr have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.

  • Telecom Sector Reforms

    In 2021, large scale structural and procedural reforms have been brought in to enhance liquidity and minimise financial stress within the telecom sector.

  • Bharatnet project

    Under the BharatNet Project 1,77,550 Gram Panchayats (GPs) have been made service ready till June 2022. Scope of BharatNet Project has been extended to all inhabited villages in the country.

  • India is one of the highest consumers of data per day

    India is one of the highest consumers of data per day with approximately 5 hours of daily time spend on smartphones.

  • Prime Minister Wi-Fi Access Network Interface (PM-WANI)

    Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services.

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Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi had given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Telecom & Networking Products sector for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. In June 2022, the Department of Telecommunications (DoT) amended the guidelines for PLI Scheme to introduce Design-led Manufacturing Scheme as part of the PLI Scheme with additional incentives worth more than INR $533.33 Mn. Applications closed on 20th July 2022. Achievements: • Total 31 applicants have been approved under the Scheme, out of which 16 are MSME, 8 Non- MSME (Domestic) and 7 Non-MSME (Global). These companies are expected to invest $450 Mn, generate 40,000 jobs and incremental production of over $24.4 Bn throughout the tenure of the PLI Scheme. • INR 1330 Cr investments has been generated till Feb 2023.

  • INR 12,195 Cr

    Scheme Outlay

Industrial Land Bank Portal

GIS - based map displaying available infrastructure for setting up business operations in the state.

Investible Projects

Investment Opportunities in Telecom

    Major Investors

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    FAQs

    Frequently
    Asked Questions

    How much FDI is allowed under telecom sector?

    100% FDI is allowed in the telecom sector under automatic route.

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    What are the advantages of investing in telecom sector?

    Some key incentives for investors in the telecom sector are:

    1. Basic customs duty (BCD) and special additional duty have been withdrawn.
    2. Importers of mobile handset components such as chargers, adaptors, batteries and wired handsets need to pay only the countervailing duty of 12.5%.
    3. A duty advantage of 10.5% exists for local manufacturers of mobile speakers and batteries

     

     

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    What are the government FDI policies for telecom sector?

    100% FDI is allowed in the telecom sector under the automatic route.

    For more information, click here [1] [2]

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    List the admissible deductions.

    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.'

    For more information, click here.

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    What are Inter- Company/Group Company and Intra-Company/Group Company transactions?

    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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