Shivaji Chatterjee
Senior Vice President, Enterprise Business
Hughes Communications India Ltd (HCIL)

The Changing Face Of The Indian Telecom Sector

The Indian telecom sector is one of the most critical segments in India’s growth story – connecting billions of Indians and nurturing many entrepreneurial dreams. Over the past years, the Indian telecom market has witnessed overwhelming growth. The increased network coverage, healthy competition, and cost centric offerings from various providers have served as the catalyst to the growing demand for telecom services in the country. Today, India stands strong as one of the world’s fastest growing telecom markets with a user base crossing more than 1.2 billion subscribers with a CAGR of 17.44 percent. India is also the second largest smartphone market and is expected to have almost 1 billion unique mobile subscribers by 2020.

This significant growth pace and the rapid transformation have largely been possible, thanks to the innovation-led approach adopted by industry players, a growing demand in the domestic sector, and strong support from policy initiatives. There is no doubt that the industry is touching newer heights with the high network expansion and roll-out, especially in rural and semi-rural areas. But, as the broadband internet subscriber base continues to surge, the telecom sector needs to address the challenge of a growing demand for high-speed connectivity among users.

Rural markets: The next avenue of growth

The Indian telecom sector is poised to witness strong growth in the coming years especially with a renewed focus on the rural market, a potential market that has largely remained untapped for years. There are over 62,443 uncovered villages in India; the government plans to connect these villages with subsidy support from the government’s Universal Service Obligation Fund (thereby increasing rural teledensity). As of February 2018, the rural subscriber base accounted for 43.24 percent of the total subscriber base, thereby fueling growth across the sector. With 70 percent of the population staying in rural areas, there is robust demand.

The growing receptiveness to explore possibilities with newer technologies including satellite-based connectivity is a positive sign but the industry is still far from leveraging its full potential. There has been a long pending demand for the overhaul of the VSAT industry which is still ailing from policy and infrastructure challenges.

Reliance Jio, one of the recent players, has sparked a wave of disruption with an aggressive approach and increased focus on rural and remote regions. The 4G telco is connecting more than 400 LTE sites largely in remote and hilly locations which are beyond the reach of terrestrial backhaul services through a satellite backhaul-based network. Beyond expanding networks, initiatives to connect the rural masses are already visible with service provider tie-ups with content providers for services related to agriculture, weather, and livelihood. The government of India has introduced the Digital India program under which all the sectors such as healthcare and retail will be connected through the internet. The Department of Information Technology intends to set up over 1 million internet-enabled common service centers across India as per the National e-Governance Plan. Major telecom service providers including Hughes are working with the government toward fulfilling the connectivity needs and bridging the digital divide.

Emerging technologies and the future of Indian telecom

With growing demand for data and speed among new age consumers, the thrust has been seen across the industry. Among the various BWA technologies, the recent developments such as LTE and emergence of IoT technologies have seen tremendous interest from industry counterparts. Reliance Jio, Bharti Airtel, and Vodafone have already launched VoLTE services in select regions with BSNL looking to join the queue. The government’s vision for smart cities has also provided the much-needed impetus to adoption and investment in newer industrial technologies including the likes of the Internet of Things (IoT). The Indian government is planning to develop 100 Smart City projects, where IoT would play a vital role in the development of those cities.

The development of a telecom infrastructure is critical to the growth of the nation and there is no doubt that India has made significant progress. There is still a lot to achieve and government support including tax benefits and recognizing telecom infrastructure as an essential infrastructure will go a long way in making India as one of the fastest, strongest, and most affordable telecom market.

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