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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 August 2022 (wireless + wireline subscribers). India has an overall tele-density of 85.15 %, of which, the tele-density of the rural market, which is largely untapped, stands at 58.44% while the tele-density of the urban market is 134.71%.
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 July 2022 and grossed $18.77 Bn.
The Telecom sector is the 3rd largest sector in terms of FDI inflows, contributing 6.24% of total FDI inflow, and contributes directly to 2.2 Mn employment and indirectly to 1.8 Mn jobs. 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.
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
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. Rural tele-density jumps from 44% in March 2014 to 58% in October 2022.
Phone exports have more than double YoY in April-Oct as mobile phone exports raced past $5 Bn mark within 7 months. This is more than double of $2.2 Bn that India clocked in same period last year.
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, 55% fiberisation of mobile towers, average broadband speeds of 25 mbps and 30 lakh kms of optic fibre rollouts by December 2022. Broadband connections rise to 816 Mn in September 2022 from 61 Mn in March 2014, growing by 1238%. By December 2024, DoT 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.
- India climbs up six slots and now placed at 61st rank as per Network Readiness Index 2022
- India secures 2nd rank in “Mobile broadband internet traffic within the country” and “International Internet bandwidth”
- India secures 3rd rank in “Annual investment in telecommunication services” and “Domestic market size”.
- 5G services have been started in 238 cities distributed across all license service areas as of 31st January 2023.
- India jumps 10 spots in median mobile speeds globally from 79th position in December to 69th place in January 2023.
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.
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 $450 Mn, generate 40,000 jobs and incremental production of over $24.4 Bn 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 $533.33 Mn. For more information: https://pli-telecom.udyamimitra.in/ Last date for application: 25 August 2022
INR 12,195 Cr
Scheme Outlay
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GIS - based map displaying available infrastructure for setting up business operations in the state.
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