IBEF印度电信业分析11月英文20181141页1mb

Summary of the Indian Telecommunications Industry

Core Content

The Indian telecommunications industry is a significant and rapidly growing sector, characterized by a large subscriber base, high penetration rates, and increasing internet usage. It is also witnessing substantial investment and policy support, which are driving innovation and infrastructure development.

Main Points

• Subscriber Base: India has the second-largest telecom network globally, with a total subscriber base of 1,189.08 million as of August 2018. Wireless subscriptions dominate, accounting for 98.13% of the total.
• Internet Subscribers: India ranks second in the world for internet subscribers, with over 512 million as of June 2018. The number is expected to double by 2021.
• Telecom Penetration: Tele-density (number of telephone connections per 100 individuals) increased from 18.23% in FY07 to 92.84% in FY18, indicating a massive expansion in connectivity.
• Data Consumption: India is the largest consumer of mobile data globally, with a year-on-year growth of 147.67% in wireless data usage to 10.418 million terabytes in Q1 FY19.
• Growth Drivers: Rising income levels, a young population, and policy support are key factors driving the growth of the telecom sector. The National Digital Communications Policy 2018 aims to attract $100 billion in investments by 2022 and create 4 million jobs.
• Infrastructure Development: The government is promoting infrastructure sharing and tax benefits to support the growth of telecom infrastructure. The emergence of the tower industry has helped reduce costs and improve capital structure.
• Technological Advancements: The adoption of BWA technologies (WiMAX, LTE) and the development of 5G services are significant trends. Reliance Jio and Bharti Airtel are leading in these areas.
• Consolidation and Mergers: Major mergers such as Vodafone and Idea forming Vodafone Idea have reshaped the industry landscape, increasing market concentration.
• Policy Support: The government has introduced several policies, including relaxed FDI norms (up to 100%), enhanced spectrum limits, and the Digital India programme to boost connectivity and digital services.
• Opportunities: The rural market, with a tele-density of 58.61% as of August 2018, presents a key growth opportunity. The growth of mobile applications and the expansion of the telecom equipment market are also notable.
• Foreign Investment: FDI inflows into the telecom sector from April 2000 to June 2018 totaled $31.75 billion, accounting for 8.15% of total FDI. The sector is expected to continue attracting foreign investments.
• Industry Associations: Key organizations like AUSPI, ACTO, IAMAI, and COAI play a vital role in shaping and regulating the industry, providing support and advocacy for telecom companies.

Key Information

• Market Segmentation: The telecom market is split into three segments: wireless, fixed-line, and broadband. Wireless dominates with 98.13% of the total subscriber base.
• Rural Growth: Rural tele-density increased from 43.05% in March 2016 to 58.61% in August 2018, with rural subscribers accounting for 44.16% of the total as of June 2018.
• Investment Trends: The telecom sector has seen substantial investments in network expansion and technology upgrades. Reliance Jio's expansion of its optical fibre network to over 1,100 cities and Bharti Airtel's plans for new sites and fibre in Gujarat are examples.
• Mobile Applications: India is the second-largest market for app downloads globally, with over 12 billion downloads in 2017. The growth is expected to continue, reaching 37.21 billion by 2022.
• Digital Initiatives: The Digital India programme aims to connect all sectors through the internet and provide every Indian with a smartphone by 2019. It also includes initiatives like free Wi-Fi in rural areas to promote a cashless economy.
• Regulatory Support: TRAI has introduced various regulations to improve service quality and protect consumer interests. It has also passed the Telecommunication Tariff Order, allowing promotional offers with transparency.
• Green Telecom: The government is promoting the use of solar and green energy for telecom towers, aligning the industry with sustainability goals.
• Skill Development: Initiatives like Microsoft's "Project Sangam" under the Skill India mission are helping in skill development and employment in the telecom sector.

Conclusion

The Indian telecommunications industry is experiencing robust growth, driven by policy support, technological advancements, and a rapidly expanding subscriber base. With a focus on rural connectivity, green initiatives, and digital transformation, the sector is well-positioned for continued growth and innovation in the coming years.