For decades, telecom has been the poster boy of Indian business success stories. The industry that has brought many firsts to the country is now the world’s second largest market in terms of subscriber base with 1.16 billion users. The country that was among the fastest in the world to rollout 4G services across its geography is now eagerly awaiting the launch of 5G services. Higher multi-Gbps speeds, lower latency, and more reliability compared to the previous-generation mobile networks are some of the benefits of 5G. As per DoT, India can expect the launch of 5G services within this year.

Market size
India is the world’s second-largest telecommunications market. The total subscriber base, wireless subscriptions as well as wired broadband subscriptions have grown consistently. Tele-density stood at 85.91%, as of December 2021, total broadband subscriptions grew to 792.1 million until December 2021 and total subscriber base stood at 1.18 billion in December 2021.
Gross revenue of the telecom sector stood at Rs. 64,801 crore (US$ 8.74 billion) by end of March, 2022. The total wireless data usage in India grew 16.54% quarterly to reach 32,397 PB in the first quarter of FY22. The contribution of 3G and 4G data usage to the total volume of wireless data usage was 1.78% and 97.74%, respectively, in the third quarter of FY21. Share of 2G data usage stood at 0.48% in the same quarter.

Telecom subscriber base
The total number of telephone subscribers in India was 1,166.93 million at the end of March-22. Urban telephone subscription decreased from 647.76 million at the end of February-22 to 647.11 million at the end of March-22 and the rural subscription also increased from 518.29 million to 519.82 million during the same period. The monthly growth rates of urban and rural telephone subscription were -0.10% and 0.30% respectively during the month of March-22. At the end of the year, the tele-density of India was 84.88%. The urban tele-density was 134.94% whereas the rural tele-density was 58.07%.

Wireless subscriber
Total wireless subscribers increased from 1,141.53 million at the end of February-22 to 1,142.09 million at the end of March-22, thereby registering a monthly growth rate of 0.05%. Wireless subscription in urban areas decreased from 625.19 million at the end of February-22 to 624.23 million at the end of March-22 however wireless subscription in rural areas increased from 516.34 million to 517.86 million during the same period. Monthly growth rates of urban and rural wireless subscription were -0.15% and 0.29% respectively Of the total wireless subscriber base, the private players command a market size of 89.76% whereas the public operators hold a market size of 10.24%. Among the operators, Reliance Jio dominated the wireless subscriber user-base with 35.37% market share and is followed by Bharti Airtel with 31.55%. Vodafone-Idea or Vi is at 3rd position with 22.83% market share.

Wireline subscribers
Wireline subscribers increased from 24.52 million at the end of February-22 to 24.84 million at the end of March-22. Net increase in the wireline subscriber base was 0.32 million with a monthly growth rate of 1.31%. The share of urban and rural subscribers in total wireline subscribers were 92.12% and 7.88% respectively at the end of March, 2022. Among the operators, BSNL has the majority market share of 30.23% of all wireline subscriber base and is closely followed by Reliance Jio with 24.85%. Airtel is 3rd position with 3.55% market share and the other state-run operator MTNL has a market share of 10.84% at the end of March 2022.

Broadband
The total broadband subscriber base at the end of the fiscal year 22 was 788.3 million as against 765 million by the same period a year ago. There are a total of 653 broadband operators in the country though the space is primarily occupied by four major players. Reliance Jio holds the lion’s share of 51.92% in the broadband market whereas the closest follower Airtel is with 27.31% market share followed by Vodafone Idea with 15.54% market share. PSU operator BNL holds  a market share of 3.45%.

Highlights of FY2021
With daily increasing subscriber base, there have been a lot of investment and development in the sector. FDI inflow in the telecom sector stood at US$ 38.25 billion between April 2000-December 2021.

Some of the major developments in the recent past are:

• In January 2022, Google made a US$ 1 billion investment in Airtel through the India Digitization Fund.
• In October 2021, Vodafone Idea stated that it is in advanced talks to sell a minority stake to global private equity investors including Apollo Global Management and Carlyle to raise up to Rs. 7,540 crore (US$ 1 billion) over the next 2-3 months.
• In October 2021, British satellite operator Inmarsat Holdings Ltd. announced that it is the first foreign operator to get India’s approval to sell high-speed broadband to planes and shipping vessels. Inmarsat will access the market via Bharat Sanchar Nigam Ltd. (BSNL) after BSNL received a license from the Department of Telecommunications.
• In October 2021, Dixon Technologies announced plans to invest Rs. 200 crore (US$ 26.69 million) under the telecom PLI scheme; this investment will include the acquisition cost of Bharti Group’s manufacturing unit.
• In September 2021, Bharti Airtel announced an investment of Rs. 50 billion (US$ 673 million) in expanding its data centre business to meet the customer demand in and around India.
• In August 2021, Tata Group company Nelco announced that the company is in talks with Canadian firm Telesat to sign a commercial pact for launching fast satellite broadband services in India under the latter’s Lightspeed brand, a move which will pit the combined entity against Bharti Enterprises-backed OneWeb, Elon Musk’s SpaceX and Amazon.
• In the first quarter of FY21, customer spending on telecom services increased 16.6% y-o-y, with over three-fourths spent on data services. This spike in consumer spending came despite of the COVID-19 disruption and lack of access of offline recharges for a few weeks

Govt. initiatives
The Government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies. Some of the key initiatives taken by the Government are as follows:

• In Union Budget 2022-23 the Department of Telecommunications was allocated Rs. 84,587 crore (US$ 11.11 billion) out of which Rs. 30,436 crore (US$ 3.99 billion) was revenue expenditure which was 36% of the total expenditure and Rs. 54,150 crore (US$ 7.11 billion) was capital expenditure which is 64.01% of total expenditure.
• To drive the development of 6G technology, the Department of Telecommunications (DoT) has developed a sixth generation (6G) innovation group.
• In October 2021, Telecom Secretary Mr. K. Rajaraman inaugurated the Quantum Communication Lab at the Centre for Development of Telematics (C-DOT), Delhi, and unveiled the indigenously developed Quantum Key Distribution (QKD) solution by C-DOT. QKD can support a distance of >100 kms on standard optical fibre.
• In August 2021, the Department of Telecommunications (DoT) initiated discussions with banks to address financial stress in the telecom sector, particularly Vodafone Idea Ltd. (VIL) that urgently requires fund infusion to stay afloat.
• In August 2021, the Department of Telecommunications (DoT) officials stated that it is working on a package, which includes reducing the revenue share licence fee to 6% of adjusted gross revenue (AGR) of the operators from the current 8%. This would be done by reducing the 5% universal service obligation levy by two percentage points.
• In July 2021, Bharat Broadband Network Limited (BBNL), on behalf of the Department of Telecommunication, invited global tender for the development of BharatNet through the Public-private Partnership model in 9 separate packages across 16 states for a concession period of 30 years. Under this project, the government will provide a maximum grant
• The Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) scheme or telecom is expected to bring in investment of around Rs. 3,000 crore (US$ 400.08 million) and generate huge direct and indirect employment.
• In April 2021, the government pointed out that firms such as Ericsson and Nokia are now eager to expand their operations in India, and global companies like Samsung, Cisco, Ciena and Foxconn have expressed interest to set up their manufacturing base in the country for telecom and networking products.
• In 2021-22, the Department of Telecommunications has been allocated Rs. 58,737.00 crore (US$ 8 billion). 56% allocation is towards revenue expenditure and the remaining 44% is towards capital expenditure.

Outlook
The future of Indian telecom looks rosy from both consumers as well as service providers’ perspective though network connectivity still remains a big issue. India is consistently growing in terms of subscriber addition and is among the biggest consumer of data worldwide with over 11 GB data consumption per month. It is expected that, over the next five years, rise in mobile-phone penetration and decline in data costs will add 500 million new internet users in India, creating opportunities for new businesses. While all this data refers to the opportunities with 4G, the horizon is expected to be much wider once 5G is rolled out in the country.
According to reports, India will have 350 million 5G subscribers by 2026 accounting for 27% of all mobile subscribers. By 2025, India will need approximately 22 million skilled workers in 5G-centric technologies such as Internet of Things (IoT), Artificial Intelligence (AI), robotics and cloud computing.