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The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 bn as of April 2022 (wireless + wireline subscribers). India has an overall tele-density of 84.88 %, of which, the tele-density of the rural market, which is largely untapped, stands at 58.16% while the tele-density of the urban market is 134.70%.
By the end of December 2021, the total number of internet subscribers increased to 829.3 mn (narrowband + broadband subscribers), out of which 37.25% of the internet subscribers belong to the rural areas. The number of broadband subscribers has increased to 788.77 mn as of April, 2022. The average monthly data consumption per wireless data subscriber has also increased by 22,605% to 14.97 GB in December 2021 from 61.66 MB in March 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 is proposed to be held by the end of July, 2022.
The Telecom sector is the 3rd largest sector in terms of FDI inflows, contributing 7% 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 sector under the automatic route.
100% Foreign Direct Investment (FDI) has now been allowed in the Telecom sector under the automatic route.
For further FDI details, please refer to FDI Policy read with Press Note. 4.
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Internet Connections Growth (2014-2021)
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Total employment
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Active 5G Devices in India
No. of smart cities
India is expected to have a digital economy of $1 tn by 2025
Active internet users in India are expected to reach 900 mn by 2025
India is aiming to manufacture mobile phones worth $126 bn by 2025-26
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Industry Scenario
India is expected to have a digital economy of $1 tn by 2025
The Telecommunications industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.
Over the last seven years, the Indian Telecom Tower industry has grown significantly by 65%. The number of mobile towers increased from 400,000 in 2014 to 660,000 in 2021. Similarly, the number of Mobile Base Transceiver Stations have grown rapidly by 187% and increased from 800,000 in 2014 to 2.3 mn in 2021.
It is also estimated that 5G technology will contribute approximately $450 bn to the Indian Economy in the period of 2023-2040. Currently, the auction of IMT/5G spectrum is proposed to be held by the end of July, 2022.
As per GSMA, India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 billion installed devices and is expected to have 920 million unique mobile subscribers by 2025 which will include 88 million 5G connections.
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.
The DoT is targeting a combination of 100% broadband connectivity in the villages, 55% fiberisation of mobile towers, average broadband speeds of 25 mbps and 30 lakh kms of optic fibre rollouts by December 2022. By December 2024, it is looking at 70% fiberisation of towers, average broadband speeds of 50 Mbps and 50 lakh kms of optic fibre rollouts at a pan-India level.
Union Budget 2022 Highlights
- Spectrum auctions to be conducted in 2022 for the rollout of 5G mobile services
- Scheme for design-led manufacturing under PLI Scheme to be launched to build a strong 5G ecosystem
- Contracts for laying optical fibres in all villages to be awarded under the Bharat Net project in FY 22-23
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
Bharat Net Project Optical fibre cables laid to 178,247 gram panchayats, out of which 161,870 are service ready. Additionally, 4,218 gram panchayats have been connected over satellite media, taking the total number of service ready gram panchayats to 166,088.
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.
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 October 2021, 31 companies (including both domestic and global companies) were provided approval under the PLI Scheme. These companies are expected to invest INR 3345 crores, generate 40000 jobs and incremental production of over INR 1.82 lakh crores throughout the tenure of the PLI Scheme. 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 4,000 crores. For more information: https://pli-telecom.udyamimitra.in/ Last date for application: 20 July 2022
INR 12,195 cr
Scheme Outlay
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