India’s Telecom sector has witnessed stupendous growth in the last few years. Today, India’s telecom Industry boasts of having the second-largest subscriber base, with a total of 1.72 Bn wireless and wireline subscribers as of March 2023.

As per the Telecom Regulatory Authority of India’s Indian Telecom Services Performance Indicators, India’s tele density, which denotes the number of telephones per 100 population, as of March 31, 2023, stood at 84.15%. It has increased by nearly 10% since March 2014.

The telecom industry is one of the most important sectors in the Indian economy, with a 6.5% contribution to the country's GDP. In the last quarter of FY 2022-2023, the industry’s gross revenue was INR 85,356 Cr ($11.38 Bn). The industry includes Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.  

The sector has played a vital role in India's economic growth and development over the past few decades. The telecommunication sector is instrumental in the development and poverty reduction through the empowerment of the masses, unlocking economic growth, employment generation, bringing in FDI, and digital transformation of essential services like education, healthcare, financial services, etc. Target 9c of the Sustainable Development Goals (SDGs) advocates significantly increasing access to information and communications technology and striving to provide universal and affordable access to the Internet in least-developed countries by 2020.

The National Digital Communications Policy 2018 was drafted as a roadmap to help realise the potential of the sector. The ambitious policy aimed to achieve the following objectives by 2022: 

1. Provisioning of Broadband for All  
2. Creating 4 Mn additional jobs in the Digital Communications sector  
3. Enhancing the contribution of the Digital Communications sector to 8% of India’s GDP from ~ 6% in 2017  
4. Propelling India to the Top 50 Nations in the ICT Development Index of ITU from 134 in 2017  
5. Enhancing India’s contribution to Global Value Chains  
6. Ensuring Digital Sovereignty 

Furthermore, the 2018 Policy estimated that India’s digital economy, due to the high penetration of mobile phones and the Internet, has the potential to reach $1 Trillion by 2025. To propel India’s telecom industry towards this direction, the 2018 policy underlined the achievement of the following goals:  

• Attracting investments of $100 Bn in the Digital Communications Sector 
• Increasing India’s contribution to Global Value Chains 
• Creation of innovation-led Start-ups in the Digital Communications sector 
• Creation of Globally recognised IPRs in India 
• Development of Standard Essential Patents (SEPs) in the field of digital communication technologies 
• Train/ Re-skill 1 Mn manpower for building New Age Skills 
• Expanding the IoT ecosystem to 5 billion connected devices 
• Accelerating the transition to Industry 4.0 

To achieve the above-mentioned goals and unlock the potential of the sector, the Government of India has taken various measures:  

Foreign Direct Investment: The Government of India approved 100% FDI in the telecom sector under an automatic route to encourage investment. This step will help 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks.

Production Linked Scheme, with a financial outlay of INR 12,195 Cr, was launched in 2021 for a period of five years to provide a 4% to 7% incentive on incremental sales over the base year to promote the manufacturing of design-led telecom and networking products manufacturing in India. The scheme provides support under the following categories:  

• Core Transmission Equipment 
• 4G/5G, Next Generation Radio Access Networks and Wireless Equipment 
• Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices and Other Wireless Equipment 
• Enterprise equipment: Switches, Routers 
• Other products, as decided by the Empowered Group of Secretaries 

So far, 42 companies have been approved under the PLI Scheme, which includes 17 design-led manufacturing companies. Under this scheme, from until March 2023, domestic and foreign companies have reported sales of INR 20,446 Cr.

PLI scheme has also been responsible for the increase in FDI inflows and exports and the transformation of India’s export basket from traditional commodities to high-value-added products. International players like Foxconn, Wistron and Pegatron have availed of this facility and shifted their base to India to manufacture iPhones and other top-end phones. The value addition has also led to increased production and exports of smartphones. Of the $101 Bn total electronics production in FY 2022-23, smartphones constituted $44 Bn, including $11.1 Bn as exports. As per DPIIT, the scheme has led to a 20% value addition in mobile manufacturing in India and has also resulted in a 20-fold increase in women's employment and localisation in IT Hardware such as batteries and laptops. 

Import and export data of telecom equipment

Additionally, the PLI scheme has also led to the achievement of India’s import substitution of 60% in the telecom sector. Today, India has become almost self–reliant in Antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment).

GatiShakti Sanchar Portal, launched by the Department of Telecommunications as a collaborative mechanism to bring all stakeholders — including from the Centre, State, Urban Local Bodies and Service Providers — together and facilitate Ease of Doing Business with an aim to provide Broadband to All, as envisaged in the National Digital Communications Policy 2018.

The Portal has centralised the Right of Way approvals process, leading to the fast laying of more Optical Fiber Cable and thus accelerating fiberization, Increased tower density for enhancing and improving connectivity, and Increased fiberization of telecom towers, leading to better broadband speed across the country.

So far, the portal has brought together the Ministry of Railways, Ministry of Road Transport and Highways, Ministry of Defence, and all 36 States/ Union Territories (UTs) to accept, process and approve Right of Way applications. The portal has resulted in the fastest 5G rollout in the world, covering 717 districts with the installation of more than 3.15 Lakhs 5G Base Transreceiver Stations (BTS) in just 10 months.

Digital Communication Innovation Square (DCIS), with a budget of INR 124 Cr for FY 2022-23 to FY 2025-26, was launched to promote the ecosystem for research, design, development, proof of concept testing, IPR creation, pilot project and manufacturing to make India a global hub for the production of telecommunication equipment and a centre for digital communication service. The scheme provisions milestones-based support to the selected start-ups (up to INR 50 Lakhs), MSMEs (up to 2 Cr), and technology products requiring higher funding (up to INR 10 Cr). Under this scheme, 126 start-ups and MSMEs have been funded with INR 105.87 Cr as grant-in-aid.The scheme has led to the generation of 55 IPRs.

Other interventions:

• National Telecommunication Institute for Policy Research Innovation & Training has formulated various courses around 5G and allied technologies. 
• 5G TestBeds have been built in premier institutes like IIT Hyderabad, Madras, Bombay, Delhi, Indian Institute of Science (IISc), etc. 
• Online certification programs in 5G Wireless technology and its applications by various Indian Institute of Technology (IITs). 
• FutureSkills PRIME program provides re-skilling/up-skilling of IT professionals in emerging technologies like IoT, Big Data Analytics, AI, Robotic Process Automation, Additive Manufacturing/ 3D Printing, Cloud Computing, Social and mobile, Cyber Security, Augmented Reality/Virtual Reality, and Blockchain. Through this initiative, the Government and industry aim to reskill/ upskill about 14 lakh employees over a period of 5 years.
• Telecom Sector Skill Council is integrating 5G and allied courses by the private global players in the National Skill Qualification Framework (NSQF) and building Centres of Excellence on IoT, ML, AI, robotics, etc., in collaboration with the academic institutes of repute. 
• Harnessing Open Radio Access Network to reduce costs, increase innovation, and ensure greater interoperability and flexibility, security and agility.  

To create secure and trusted telecommunications, resilient supply chains, and enable global digital inclusion, India and the US have established two Joint Task Forces on advanced telecommunications, focused on Open RAN and research and development in 5G/6G technologies. This public-private research initiative will be jointly led by India’s Bharat 6G and the US Next G Alliance. The two countries are also collaborating on Open RAN field trials and rollouts, including scaled deployments, in both countries with operators and vendors of both markets, backed by U.S. International Development Finance Corporation (DFC) financing. Additionally, the Department of Telecommunications (DoT) signed a MoU with M/s VVDN Technologies Private Limited to facilitate registered startups, innovators and MSMEs working in the field of Open RAN to get their product tested at the existing lab of M/s VVDN at Gurugram.

The successful implementation of ORAN in India relies heavily on the adoption by telecom service providers. Airtel successfully conducted India’s first ORAN-based live 5G network validation in the field and achieved 1 Gbps+ speed using commercial mobile devices. Airtel is also leading the innovation efforts of the ORAN Alliance in India and is striving to strengthen its technology partnership with potential ORAN vendors and scale it commercially. Airtel is also a member of the Open RAN Policy Coalition (ORPC), whose other members include Jio, Ciena, Cisco, and AT&T, among others. Similarly, Vodafone Idea is also exploring partnerships with Samsung and Mavenir on ORAN-based and vRAN technologies to reduce the cost of deployment of 5G.

Conclusion

To conclude, telecom is a critical tool for development, governance, and ease of doing business, to ensure that fibre and wireless network is available across India, the government has adopted a multipronged strategy. To achieve complete connectivity, the government has been implementing schemes like BharatNet, which has successfully connected 202,64 Gram Panchayats, commissioned 663,827 Fibre-To-The-Home (FTTH) connections, and installed 104,675 Wi-Fi hotspots to ensure last-mile connectivity. Similarly, to enhance mobile coverage in remote and border areas, the government has been promoting the installation of Base Transreceiver Stations (BTS).  

As a result of the above-mentioned initiatives and policies introduced in the past few decades, the telecom sector is growing at a fast pace. It is expected that the Indian telecom market size is expected to grow at a CAGR of 9.40% to reach $69.62 Bn during the next five years.