COVID-19 slowed down the world just short of a complete halt but, with the tireless efforts of telcos, we Indians, aided by seamless connectivity, were able to adjust rapidly to the new normal. Telcos, faced with an exploding demand for data, worked overtime and kept up network performances to meet the unnerving and sudden quantum of online collaborations, virtual schooling and electronic payments. This accelerated digitization thrust upon us by the pandemic will be seen as hastening the process of India becoming the next big Break Out Economy.
Internet connectivity in India has more than doubled in the past half decade and an estimated 600 million plus smartphones are already in circulation. With statistics as unprecedented as these, will the Indian telecom ecosystem witness an even higher uptrend in the coming years? Let’s look at the major factors at play here.
Bridging the physical divide
Indian businesses have traditionally thrived on the comfort of physical meetings and in-person collaboration, but the need for physical distancing in the wake of the pandemic has forced upon us a culture of online collaborations that drive businesses virtually.
Online meetings, once considered poor alternatives to mandatory business travel, overnight became the only way businesses could operate. Add online education to the mix and the overall transformation will manifest itself as a multifold increase in time people spent on collaboration applications. These apps aren’t only driving significant business interactions, they are also shaping the culture for next generation Indians who are now swiftly adapting to online learning. This newfound convenience and economic advantage of these tools seems to be translating into a highly sustained trend of virtual collaborations that will add further relevance to the Indian telecom sector.
The Indian telecom sector, saddled with enormous debts and regulatory headwinds, got a much-needed boost in 2020 when many well-known global companies, decided to invest over USD 10 billion into the Indian telecom market. This development, coupled with favorable government policies promoting manufacture of handsets and electronic components, has led global OEMs and contract manufacturers to expand their footprint and production in India. Handset bigwigs along with smaller players have set up some of their production facilities in India, leading to a reconfiguration of the global supply chain.
Competition driving excellence
With predominantly three telecom players remaining in the market and the price wars almost settling, the competitiveness of Indian telecom has been redefined. The industry’s focus has now shifted to quality customer acquisition and operators are increasingly relying on digital channels to acquire and verify customers. Competition has also meant that operators are investing heavily in their networks and increasingly using initiatives like spectrum refarming, carrier aggregation and network virtualization in a bid to provide enhanced quality of service as the need to retain quality customer bases intensifies for all. In fact, the launch of free recharge packs by the leading Indian telcos, which would benefit over 200 million low-income customers, is an exemplary exercise in their overall customer retention strategy of driving connectivity and customer loyalty across all income groups. This diversity of Indian customers based on income groups drives the extreme competition in the handset segment which successfully caters to the affluent and the underprivileged alike.
The Indian telecom sector, dynamic as it has always been, was elevated and enhanced by the crisis. However, continued global interest, friendly government policies and a highly aware customer will prove to be the key ingredients of this growth story called Digital India going forward.
Co-authored by Sumit Kapoor, Associate Director, KPMG in India