INDIAN TELECOMMUNICATION INDUSTRY

INDIAN TELECOMMUNICATION INDUSTRY

?INTRODUCTION:

India is currently the world's second-largest telecommunications market, with 1.16 billion subscribers, and has had rapid expansion over the last decade. According to a report developed by the GSM Association (GSMA) in partnership with Boston Consulting Group, India's mobile economy is fast increasing and will contribute significantly to the country's Gross Domestic Product (GDP) (BCG). In 2019, India overtook the United States as the second-largest market for app downloads.

The government of India's liberal and reformist policies, as well as strong consumer demand, have aided in the rapid growth of the Indian telecom sector. The government has provided easy market access to telecom equipment as well as a fair and proactive regulatory environment to ensure that consumers may get telecom services at reasonable pricing. Foreign Direct Investment (FDI) norms have been deregulated, making the industry one of the fastest expanding and top five job creators in the country.

?MARKET SIZE:

The second-largest telecommunications market in the world is India.

• In September 2021, the overall subscriber base was 1189.15 million. In September 2021, the tele-density of rural customers increased to 59.33 percent, up from 58.96 percent in September 2020. This increase points to a potential increase in demand from the rural sector.
• In September 2021, the total wireless or mobile telephone user base increased to 1166.02 million from 1,148.58 million in September 2020. In September 2021, the total number of internet subscribers was 794.88 million. There were 24.29 million wired internet subscribers and 787.94 million wireless internet subscribers among this subscriber base.
• In the first quarter of FY22, the telecom sector's gross revenue was Rs 64,801 crore (US$ 8.74 billion).
• In the first quarter of FY22, India's overall wireless data usage increased 16.54 percent quarterly. In the third quarter of FY21, 3G and 4G data usage contributed 1.78 percent and 97.74 percent, respectively, to the overall volume of wireless data usage. In the same quarter, 0.48 percent of people used 2G data.
• In India, rising mobile phone penetration and falling data costs will add 500 million additional internet users over the next five years, opening up new commercial options.

?MAJOR DEVELOPMENTS IN THIS SECTOR:

There has been a lot of investment and development in the sector as the subscriber base grows on a daily basis. According to data given by the Department for Promotion of Industry and Internal Trade, FDI inflow into the telecom sector was US$ 37.97 billion from April 2000 to March 2021. (DPIIT).

The following are some recent developments:

• ?Vodafone Idea said in October 2021 that it is in advanced talks to sell a minority share to global private equity investors such as Apollo Global Management and Carlyle in order to fund up to Rs. 7,540 crore (US$ 1 billion) in the next 2-3 months.
• Inmarsat Holdings Ltd., a British satellite operator, stated in October 2021 that it is the first foreign operator to receive India's authorisation to sell high-speed broadband to planes and ships. After receiving a licence from the Department of Telecommunications, Inmarsat will enter the market through Bharat Sanchar Nigam Ltd. (BSNL).
• Bharti Airtel stated in September 2021 that it would invest Rs 50 billion (US$ 673 million) in growing its data centre operations to suit consumer demand in and around India.
• Nelco, a Tata Group company, announced in August 2021 that it is in talks with Telesat, a Canadian firm, to sign a commercial agreement to launch fast satellite broadband services in India under the latter's Lightspeed brand, pitting the combined entity against Bharti Enterprises-backed OneWeb, Elon Musk's SpaceX, and Amazon.
• Vodafone Idea Ltd. (VIL) said in March 2021 that the spectrum it had bought in five circles will help it boost 4G coverage and capacity, allowing it to provide customers with a "better digital experience."
• The Advanced Television Systems Committee (ATSC) and the Telecommunications Standards Development Society of India (TSDSI) inked a pact in March 2021 to encourage the adoption of ATSC standards in India so that broadcast services can be viewed on mobile devices. This permits the TSDSI to adhere to ATSC standards, promoting worldwide harmonisation of digital broadcasting standards.
• Customer spending on telecom services climbed 16.6% year over year in the first quarter of FY21, with nearly three-quarters of that spent on data services. Despite the COVID-19 interruption and the lack of access to offline recharges for a few weeks, consumer spending increased.
• As of May 2020, India had over 500 million active internet users (those who had used the internet in the previous month).

?GOVERNMENT INITIATIVES:

The government has accelerated telecom reforms and continues to be aggressive in allowing opportunity for telecom companies to flourish. The following are some of the government's major initiatives:

• The Department of Telecommunications (DoT) has created a sixth generation (6G) innovation group to help push the development of 6G technologies.
• Mr. K. Rajaraman, the Telecom Secretary, inaugurated the Quantum Communication Lab at the Centre for Development of Telematics (C-DOT) in Delhi in October 2021, and showcased the C-DOT-developed Quantum Key Distribution (QKD) solution. On ordinary optical fibre, QKD can sustain a distance of >100 kilometres.
• The Department of Telecommunications (DoT) began talks with banks in August 2021 to address financial hardship in the telecom sector, particularly Vodafone Idea Ltd. (VIL), which is in desperate need of cash.
• The Department of Telecommunications (DoT) officials indicated in August 2021 that they are working on a package that includes lowering the revenue sharing licence charge from 8% to 6% of the operators' adjusted gross revenue (AGR). This would be accomplished by lowering the 5% universal service obligation charge by two percentage points and providing operators with annual relief of around Rs. 3,000 crore (US$ 403.63 million).
• On behalf of the Department of Telecommunication, Bharat Broadband Network Limited (BBNL) issued a global tender in July 2021 for the development of BharatNet using the Public-Private Partnership model in nine separate packages throughout 16 states for a 30-year concession period. The government will provide a maximum grant of Rs. 19,041 crore for this project.
• The telecome production-linked incentive (PLI) scheme, worth Rs. 12,195 crore (US$ 1.65 billion), is estimated to attract investment of roughly Rs. 3,000 crore (US$ 400.08 million) and create a large number of direct and indirect jobs.
• The government stated in April 2021 that corporations like Ericsson and Nokia are eager to expand their operations in India, and that global companies like Samsung, Cisco, Ciena, and Foxconn have expressed interest in establishing manufacturing bases in India for telecom and networking goods.
• TEPC (Telecom Equipment Export Promotion Council) organised India Telecom 2021 in March 2021, a venue for technology convergence and commercial interchange.
• Under the Department of Telecom, the Union Cabinet authorised a Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) plan for telecom and networking equipment.
• The Department of Telecommunications has been granted Rs. 58,737.00 crore (US$ 8 billion) for the fiscal year 2021-22. Revenue spending receives 56 percent of the allocation, while capital expenditure receives 44 percent.
• The government allocated Rs. 14,200 crore (US$ 1.9 billion) for telecom infrastructure in the Union Budget 2021-22, which includes the completion of an optical fibre cable-based network for Defense services, the rollout of broadband in 2.2 lakh panchayats, and the improvement of mobile services in the North East.
• India and Japan signed a Memorandum of Understanding (MoU) on January 15, 2021 to expand their collaboration in the field of information and communications technologies. The MoU was signed by Ravi Shankar Prasad, Union Minister for Communications, Electronics and IT, and Takeda Ryota, Japanese Minister of Internal Affairs and Communications.
• The Department of Telecommunications (DoT) published a Notice Inviting Applications (NIA) for a spectrum auction in the 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, and 2,500 MHz bands on January 6, 2021. The deadline for applications to participate in the auction is February 5, 2021, and the sale will begin online on March 1, 2021.
• The Union Cabinet, led by Prime Minister Narendra Modi, approved a proposal from the Department of Telecommunications to establish up Public Wi-Fi Networks by Public Data Office Aggregators (PDOAs) to provide public Wi-Fi services through Public Data Offices in December 2020. (PDOs).
• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the provision of underwater optical fibre cable connectivity between the Mainland (Kochi) and the Lakshadweep Islands in December 2020. (KLI Project).
• On November 4, 2020, the Union Cabinet, chaired by Prime Minister Mr. Narendra Modi, approved the signing of a Memorandum of Understanding (MoU) on cooperation in the field of telecommunications/information and communication technologies between the Ministry of Communication and Information Technology and the Department of Digital, Culture, Media and Sports (DCMS) of the United Kingdom Government (ICTs).
• Mr. Narendra Modi, Prime Minister of India, inaugurated an initiative on September 21, 2020, to connect all 45,945 villages in Bihar to optical fibre internet connection. The project will be finished by March 31, 2021, at a cost of Rs. 1,000 crore (US$ 135.97 million); the Department of Telecommunications will fund Rs. 640 crore (US$ 87.01 million) of capital expenditure.
• The Production Incentive Scheme (PLI) for Large-Scale Electronics Manufacturing was approved by the government in March 2020. The plan provides a production-linked incentive to stimulate domestic manufacturing and attract substantial investments in mobile phone manufacturing and certain electronic components, such as ATMP units (Assembly, Testing, Marking, and Packaging).
• The FDI cap in the telecom industry has been raised to 100% from 74%, out of a total of 100%. The government notified 100 percent foreign direct investment (FDI) via the automatic route in the telecoms sector in October 2021, up from 49 percent previously. Infrastructure firms that deliver dark fibre, electronic mail, and voice mail are allowed up to 100 percent FDI.

?ACHIEVEMENTS:

The following are the government's accomplishments over the last four years:

• The Department of Telecommunications has created 'Tarang Sanchar,' a web service that provides information on mobile towers and EMF compliance.
• In September 2021, payments over the universal payments interface (UPI) reached an all-time high of 3.65 billion (by volume), with transactions totaling Rs. 6.54 trillion (US$ 87.11 billion).
• The number of people using the internet has increased by more than 75%, from 251 million to 446 million.

?ROAD AHEAD:

By 2020, revenue from telecom equipment is estimated to reach US$ 26.38 billion. By 2021, the number of internet customers in the country is predicted to double to 829 million, with overall IP traffic growing fourfold at a CAGR of 30%.

According to a Zenith Media analysis, India will become the fastest-growing telecom advertisement industry between 2020 and 2023, with an annual growth rate of 11%.

The Indian government intends to build 100 smart city initiatives, with IoT playing a key part in their development. The National Digital Communications Policy of 2018 aimed to attract $100 billion in telecoms investment by 2022, according to the policy.