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 mnemployment 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.
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.