Connecting the world

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.

  • Total number of Subscriber Identity Module (SIM) connections is expected to reach 1.4 bn by 2020 from 1.1 bn in 2017
  • Telecom industry contribution to GDP is expected to reach 8.2% by 2020 from 6.5% in 2017

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

  • mn

    Total employment

  • mn+

    Smartphone users

  • No. of smart cities

Telecom India

Indian Mobile industry contributed over $ 140 bn to India's GDP in 2015

Telecom Sector in India

Digital India is expected to create $ 1.3 tn business opportunity by 2020

Mobile Industry in India

Number of internet users in India is expected to reach 829 mn by 2021

Industry Scenario

The Indian Mobile industry is expected to create a total economic value of $217.4 bn by 2020.

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 70 companies have received approval from the Department of Telecommunications (DoT) to provide MVNO services. The majority of these companies are focused on Tier 2 and Tier 3 cities

Growth Drivers

  • Growing demand

    Nominal per capita income recorded a CAGR of 10.4% during 2012-17

  • Increasing internet revenues

    Mobile value-added service industry is expected to grow at a CAGR of 18.5% during the period 2015-2020 and reach US $23.0 Billion by 2022

  • Increased equipment manufacturing

    268 mobile and mobile components manufacturing units set up across the country

  • Make in India

    The government announced Phased Manufacturing Program (PMP) to promote domestic production of mobile handsets

  • Bharatnet project

    Optical fiber cables laid over 100,000 gram panchayats

Major Investors

Data On Map

Telecom industry

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Asked Questions

How much FDI is allowed under telecom sector?

100% FDI is allowed in telecom sector (of this upto 49% is allowed through the automatic route and beyond 49% under government route).

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



What are the government FDI policies for telecom sector?

100% FDI is allowed in telecom sector. 49% is allowed through the automatic route.

For more information, click here.

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.

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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Strategic Investment Research Unit (SIRU)

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