Future of Telecom in India


Each year the telecom subscriber base is increasing and so is the amount of investment.

The Government is quite seriously considering the need to make this sector flourish

Looking at the numbers of telecom subscriptions happening per year, it can be safely said that India ranks second or has the second-largest user base of telecom services in the whole world. 70 % of the total Indian population lives in the villages and telecom facilities or services have penetrated at least in the 58.45 % of these rural areas and this will bring about huge change obviously a positive change in the telecom industry in India as a whole. The National Digital Communication policy of government launched in the year 2018 aims at bringing investment worth $100 billion which is likely to offer more than 4 billion jobs in the telecom sector by 2022.

All the stats and numbers indicate that this sector is going through a revival – a positive for telecom sector.

What is telecommunication and what is the significance of this industry in India?

Telecommunication is responsible for a company’s overall growth. By the dint of telecommunication communication is done which includes voice calling services, internet connection, SMS system, satellite television, FM and Radio, etc. If you have a business, you just can’t survive without the telecom industry because you must take care of a lot of things to make your business flourish, below mentioned are a few points that will help you to understand fully…

  • If you want your business to operate smoothly you must communicate with your stakeholders, investors, vendors, service providers, etc. all at once and for this, you need the help of the telecom industry.
  • You want your business to flourish and for that, you have to create your presence both online and offline to ensure conversions. You need clients to survive and from where will you get clients? By placing advertisements in several places such as online ad campaigns, television advertisements, advertisements on radio and FM, etc. and for all these, you need telecommunication industry to stand by your side.
  • It is essential for customer relationship management, employee management etc.
  • We all know that nowadays we get everything available online and this wouldn’t have been possible without the telecom industry.

What does the current Market Size in India look like?

  • Today there are more than 604.21 million internet users or subscribers in India.
  • The total telecom subscriber base in India is a whopping number, precisely, 1,183.51 million.
  • If we consider the number of people downloading mobile applications in this country we will be amazed because India is far ahead of the USA in this matter. The market of Google Play is increasing ever since 2017.
  • Further predictions suggest that the number of users using mobile phones will increase in the next 5 years because that data cost will come down and this will bring 500 million new internet subscribers. This is great news for all because in this way new job prospects will open up more in our country.

The investment scenario in this sector and its impact on the economy of the country

Each year the telecom subscriber base is increasing and so is the amount of investment. This, in turn, is responsible for the development of this sector in our country. The total foreign investment in this sector starting from March 2000 to April 2019 stood at US$ 32.82 billion, which is an enormous amount indeed.

Starting from the first quarter of 2018 India’s mobile application market is moving at a really fast pace to become the largest and fastest-growing market. Till date, Indians are the greatest and the most-loved consumers of Google Play Store.

The development in the sector has inspired Bharti Airtel to install 2000 km of optical fiber in Gujarat also they are going to launch 6000 brand new sites.

The Government’s Digital India movement brought a lot of change as the rate of transactions happening via mobile has increased by 5%, now at least 325.28 million users are opting for mobile transactions which is certainly positive for this sector.

You must have heard about Vodafone Idea which is a grand collaboration between Vodafone and Idea Cellular they’ve together become the fastest-growing also the largest telecom company in this country.

Jio’s plans to move a step ahead with their fiber-to-the-home offering is great news as far as the future of the telecom industry in India is concerned. This entire system is to be termed as the JioGigaFiber and it is expected to become one of country’s biggest greenfield roll out which will consist of wired broadband services covering at least 1600 cities of this country.

In light of this context, there seems to be a looming shadow for BSNL/MTNL plans. Whether their plans to launch 5G services works out or not is left for time to tell, as the Government gradually moves towards privatization, closing these PSUs.

Jio is working towards protecting data which might be a turning point for agriculture, healthcare and education sectors; in turn, this move will help in reviving the country’s economy to some extent at least.

What is the Government doing to help this industry grow?

The Government is quite seriously considering the need to make this sector flourish and that’s why some of the initiatives have been taken which might help in the future.

  • 1 million common service centers that have internet facility will be set up throughout the country, and this comes under the National e-governance plan of the Indian government.
  • To increase the growth of the telecom sector the government has now sanctioned 100% FDI inflows. Previously this was just 74%…. which means now this move of the government will add to the GDP of the country.
  • Foreign investments will be done up to 100% for the development of the infrastructure here.
  • The Government of India is increasingly encouraging people to go digital hence the Digital India Program which means now the healthcare sectors, retail, etc. and everything else will always remain connected and people will have direct access to all these facilities through the internet.
  • Internet coverage has increased by 75% which means now 446 million users are using the internet and previously the number was just 251 million.
  • The Optical Fiber Cable (OFC) coverage across the country has doubled –previously it was 700,000 km but now it has become 1.4 million km.
  • The FDI inflows have increased by five folds in this sector– from US$ 1.3 Billion in 2015-16 to US$ 6.1 billion in 2017-18 (up to December 2017)

Conclusion

Overall it can be said that yes, the telecom sector in India is increasing by leaps and bounds. And cutting-edge technologies like artificial intelligence are likely to make things easier by the beginning of the next decade. Machine Learning is another sensational technology that has got an immense capability to make this sector reach the zenith in future.

However, there are a few challenges too such as fixed-line penetration – this one is a real problem in India since the country is lacking in fixed-line penetration, the high right of way cost, etc. (Read more) But at the same time there are ways to overcome these problems too so, surely there is no stopping the telecom industry in India from reaching higher skies.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh