SPOTLIGHT ON INDIAN ELECTRONICS Spotlight on Indian Electronics | Page 139

Telecom

SECTOR IN INDIA

Introduction
India is currently the world’ s second-largest
demand in the rapid growth in the Indian telecom sector.
telecommunications market and has registered strong
The government has enabled easy market access to
growth in the past decade and half. The Indian mobile
telecom equipment and a fair and proactive regulatory
economy is growing rapidly and will contribute
framework that has ensured availability of telecom services
substantially to India’ s gross domestic product( GDP),
to consumer at affordable prices. The deregulation of
according to report prepared by GSM Association( GSMA)
foreign direct investment( FDI) norms has made the sector
in collaboration with the Boston Consulting Group( BCG).
one of the fastest growing and a top five employment
The liberal and reformist policies of the Government of
opportunity generator in the country.
India have been instrumental along with strong consumer
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Telecom subscriber base expands substantially
India is currently the second-largest telecommunication market and has the third highest number of internet users in the world
Between FY 07-16 India’ s telephone subscriber base expanded at a Compound Annual Growth Rate( CAGR) of 19.5 per cent to 1,022.61 million and teledensity to 80.98
In September 2015, total telephone subscription stood at 1,022.61 million, while teledensity was at 80.98 percent
Composition of telephone subscribers( FY16 *)
41.0 %
20.15 % Urban Wireless
Rural Wireless
Urban
56.5 %
Wireless
Rural Wireless
Source: Telecom Regulatory Authority of India, TechSci Research Note: FY16 *- Data as of September 2015
India is the world ' s second-largest telecommunications
per cent by 2017. The emergence of an affluent middle
market, with over 1.0 billion subscribers as of May 2015.
class is triggering demand for the mobile and internet
The wireless segment( 97.36 per cent of total telephone
segments. Availability of affordable smartphones, along
subscriptions) dominates the market. It has also been
with a rise in the security level of mobile transactions, is
growing at a brisk pace. During FY07-15, wireless
expected to boost growth of transactions conducted via
subscriptions witnessed a CAGR of 24.78 per cent to 969.8
phones, with the overall transaction value being tripled in
million.. It is also the second largest country in terms of
2014 from last year.
internet subscribers. India had 267.39 million internet
Strong policy support from the government has been
subscriptions as of December 2014.
crucial to the sector’ s development. FDI cap in the telecom
India’ s telecommunications market is expected to
sector has been increased to 100 per cent from 74 per
experience further growth, fuelled by increased non-voice
cent. In January 2015, the Government of India
revenues and higher penetration in rural market. Telecom
recommended reduction in license fees of telecom by 6 per
penetration in the nation ' s rural market is expected to
cent for operators; telecom operators currently pay 8 per
increase from 46.14 per cent as of December 2014 to 70
cent of adjusted gross revenue as licence fee.
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