Telecom services industry in 2019-20
India is currently world’s second-largest tele-communications market with a subscriber base of 1.20 billion. The sector has witnessed exponential growth over the last few years owing to affordable tariffs, wider service availability, and roll out of new facilities and services, such as 3G and 4G, evolving consumption patterns of subscribers, and conducive regulatory environment. The Indian telecom economy is growing and is expected to contribute substantially to India’s gross domestic product (GDP) in the coming years. The liberal and reformist policies of the Government of India along with the strong consumer demand has contributed immensely to the rapid growth of the Indian telecom sector. The government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework, which has ensured availability of telecom services to consumer at affordable prices. The deregulation of foreign direct investment (FDI) norms has made the sector one of the fastest growing and a top five employment-opportunity generator in the country.
The Telecom Regulatory Authority of India (TRAI) has been giving recommendations about ease of doing business in telecom sector from time to time. Many of these recommendations have been accepted by the government and this has made spectrum trading, spectrum sharing, merger of licenses, and various other payment terms and conditions easier for the telecom licensees. The Indian telecom sector enjoys the facility of mobile number portability (MNP), which is providing option to the customer to change service provider while retaining the mobile number. This has resulted in greater satisfaction among the subscribers and has put the telecom service providers on alert to maintain quality of service.
TRAI had made a lot of effort in proliferation of broadband in the country. Accordingly, it has been persistent in recommending de-licensing of more and more spectrum, especially in 5.8. GHz band. Recent action by the Department of Telecom (DoT) in de-licensing of a large chunk of 5.8 GHz band will provide better penetration of Wi-Fi in the country. Further, the recommendation of TRAI on Public Wi-Fi networks utilizing a completely pluggable infrastructure, when accepted by DoT, will result in large scale deployment of public Wi-Fi in the country, thereby improving India’s ranking in availability of broadband with reasonable download speed.
The country is ready for the deployment of 5G networks as all the necessary policy initiatives are in place. The DoT has facilitated installation of test beds for 5G in the country and the policy for releasing spectrum for 5G trials is also in place. TRAI has already recommended base price for auction of 3.3 to 3.6 GHz spectrum.
TRAI has recommended a robust policy for proliferation of machine-to-machine/IoT services in the country. Once the recommendations are accepted by the DoT and necessary changes are incorporated in the licensing conditions, the Indian telecom sector should see great opportunity in the deployment of machine-to-machine and loT services.
Further, in order to create an enabling environment for timely rollout of 5G in India, the Authority has published a White Paper on Enabling 5G in India on February 22, 2019. The White Paper highlights the specifications of the 5G technology, discusses the potential use cases and architecture of 5G network, deliberates those areas that will require investment for 5G deployment, covers the spectrum requirements for 5G networks, and tries to identify regulatory challenges that need to be addressed for the deployment of 5G in India.
With 665.30 million internet subscribers, as of June 2019, India ranks as the world’s second-largest market in terms of total internet users. India is also the world’s second-largest telecommunications market, with total subscriber base of 1186.63 million at the end of June 2019. Also, India is world’s fastest-growing market for mobile applications and has become the second-largest market in terms of number of app downloads, surpassing United States of America (USA). Country-wide optical fiber cable (OFC) coverage has doubled from 700,000 km to 1.4 million km during the last five years. FDI inflow into the telecom sector has also doubled to USD 32.82 billion during the decade, as per the trade guide.
With daily increasing subscriber base, there have been lots of investments and developments in the sector. Digital India program launched by the Government of India intends to connect sectors, such as healthcare, education, retail, and more through internet. The National Digital Communications Policy 2018 envisaged attracting investments worth USD 100 billion in the telecommunications sector by 2022. Over the next five years, rise in mobile phone penetration and decline in data costs is expected to add another 500 million internet users and create opportunities for new businesses. Revenues from the telecom equipment sector are expected to grow to USD 26.38 billion by 2020. The number of internet subscribers in the country is expected to double by 2021 to 829 million. The Indian government has planned to develop 100 smart city projects, where loT would play a vital role in development of those cities. The Indian mobile value-added services (MVAS) industry is expected to reach USD 23.8 billion by 2020.
TRAI is well aware of the future challenges and will be proactively involved in the development and betterment of the Indian telecom sector in the coming years with the active participation of all the stakeholders through its unique consultation process.