The Indian telecom industry has increased foreign direct investment (FDI) cap from 74% TO 100%. FDI of up to 100% is allowed for infrastructure providers providing dark fibre, electronic mail, and voice mail. Moreover, 100% FDI in the Telecom Sector is permitted under the Automatic Route.
Indian telecom sector records FDI inflow of approximately $39.32 billion since April 2000 to March 2024, while underscoring its global significance. The sector is anticipated to surpass 350 million 5G subscriptions by 2026, which represents 27% of all mobile subscriptions in the country.
According to India Brand Equity Foundation (IBEF), the wireless subscription base has reached to 1,168.95 million in May 2024. Jio stood with the highest the wireless subscriber base of 474.61 million, Bharti Airtel 387.76 million, Vodafone Idea 218.15 million, and BSNL 86.32 million. Gross revenue generated from the telecom sector has reached at Rs. 2.4 lakh crore ($29.00 billion) in FY24.
Government has achieved multiple milestones in last four years such as the launch of ‘Tarang Sanchar’ by Department of Telecommunication. It’s a web portal which shares information on mobile towers and EMF Emission Compliances. The payments on unified payments interface (UPI) hit an all-time high by volume of 3.65 billion, with transactions worth around Rs. 6.54 trillion ($87.11 billion) in September 2021. As of July 2023, 473 banks were updated on UPI. Also, a growth of 75% has seen in internet coverage from 251 million users to 446 million.
The Indian Government is planning to advance 100 smart city projects, and Internet of Things (IoT) which will play a significant role in developing various cities. The value of export of mobile phones in FY24 has risen by 42% reaching at $15.6 billion.
Robust Demand
The telecom industry has experienced speedy growth, driven by technological developments, enlarged mobile penetration, and a growing digital services market. Tele-density of rural subscribers extended 59.59% as of May 2024. The total volume of wireless data usage grown in excess of 10 folds from 4,206 petabytes in Q1, FY18 to 47,629 petabytes in Q2, FY24.
Investments
India’s telecom sector has made many investments such as in Union Budget 2024-25, the Department of Telecommunications and IT was allocated Rs. 116,342 crore ($13.98 billion) for the development of telecom industry. Additionally, the Production Linked Incentive (PLI) Scheme for large scale electronics manufacturing received around Rs. 4,700 crore ($569.49 million) for investment as of September 2022.
Policy Support
Government policies such as Telecommunications Act 2023, National Digital Communications Policy 2018, and Public Procurement (Preference to Make in India) are some effective policies which helps in boosting India’s telecom industry. Government of India also made several incentives and schemes such as Production-Linked Incentive (PLI) scheme, National Broadband Mission, PM-WANI, Telecom Technology Development Fund, Digital Communication Innovation Square (DCIS) and many more for the development of telecom industry.
For PLI Scheme under the Department of Telecom, the Union Cabinet has approved Rs. 12,195 crore ($1.65 billion) for telecom & networking products. The National Digital Communications Policy 2018 predicted to attract investment worth $100 billion in the telecommunications sector by 2022. This target is achieved by meeting telecom industry's present and future technological requirements such as Atmanirbhar Bharat programme.
Opportunities
Telecom industry is transformed as India ranks 2nd in the International Mobile Broadband Internet Traffic and International Internet Bandwidth. Also, by the end 2025, India will require approx. 22 million skilled workers in 5G-centric technologies such as Artificial Intelligence (AI), Internet of Things (IoT), robotics and cloud computing.
