Telecom: The Buzz Never Stops Here
India's telecommunications industry has firmly established itself as the world's second-largest with a subscriber base of 1.179 billion as of August 2023, encompassing both wireless and wireline subscribers. The nation's tele-density stands at an impressive 84.69 per cent, with rural areas showcasing immense potential at 58 per cent, and urban areas soaring at an outstanding 133.55 per cent.
The industry's commitment to technological advancement was underscored by Indian telecom service providers, who successfully completed their 5G rollout obligations across all 22 licensed service areas in an astounding 10 months. This achievement not only secured India's position as the second-largest 5G network globally but also exemplified the sector's alignment with the 'Digital India' vision.
Further, the advent of 6G technology marked another milestone, propelling India towards becoming a global leader in the digital frontier. Prime Minister Narendra Modi's release of India's 6G Vision document outlined ambitious goals, including a targeted 6G deployment by 2030. High-level panels and the establishment of 6G labs by industry leaders like Nokia and Ericsson signify a collective effort to shape India's telecom future and contribute significantly to global 6G research.
Data Revolution
The data boom is palpable, with internet subscribers reaching a staggering 881.25 million by the end of March 2023. Notably, 40.62 per cent of these subscribers belong to rural areas, showcasing the widening digital reach. The average monthly data consumption per wireless subscriber has seen a remarkable surge, increasing from 61.66 MB in March 2014 to an impressive 17.36 GB in March 2023. India stands as one of the highest daily data consumers globally, with approximately five hours spent on smartphones each day.
The industry's exponential growth is fuelled by a combination of factors, including affordable tariffs, widespread availability, mobile number portability, expanding 3G and 4G coverage, evolving subscriber consumption patterns, government initiatives supporting domestic telecom manufacturing, and a favourable regulatory environment.
Looking Ahead At 2024
As we celebrate the monumental achievements of 2023, the stage is set for an even more promising future in 2024 for the Indian telecom sector. The government's approval for the auction of IMT/5G spectrum for 5G service deployment within the country, held successfully by the end of July 2022 and grossing an impressive $18.77 billion, paves the way for enhanced digital connectivity.
Notably, the telecom sector, already the fourth-largest in the country in terms of FDI inflows and contributing 6 per cent of total FDI inflows, continues to be a major employment generator, supporting 2.2 million direct and 1.8 million indirect jobs. With 100 per cent foreign direct investment (FDI) allowed in the telecom sector, the stage is set for continued international collaboration and investments.
The handset boom is poised to escalate further, with India on track to become the world's second-largest smartphone market by 2025. As per projections, India will have around one billion installed devices and an estimated 920 million unique mobile subscribers by 2025, including 88 million 5G connections. The anticipated contribution of approximately $450 billion to the Indian economy from 2023 to 2040 through 5G technology reflects the sector's significant role in shaping India's economic landscape.
As we head into 2024, the trajectory of the Indian telecom sector is undeniably one of celebration and anticipation. The groundwork done in 2023, coupled with visionary goals and collaborative efforts, positions the industry to scale even greater heights, further solidifying its global prominence and contributing substantially to India's digital revolution.
Trends to Watch Out For
Telecom sector expert Charu Paliwal says the key trends to watch out for in 2024 are sustainability, AI, and Cybersecurity. “Telcos around the globe are increasingly implementing sustainability initiatives in their operations. Efforts to make next-generation 5G gear greener, eliminate e-waste, reduce carbon footprints, and wider ESG tracking and reporting are being pushed. Sustainability will certainly be a key focus in 2024,” says Paliwal.
As for artificial intelligence, Paliwal says the telecom industry is already leveraging AI for an array of applications, be it network optimisation, customer service support through virtual assistants, personalised recommendations, and more. “In 2024, it is expected that the use of AI, particularly Generative AI, will become more mainstream. However, cybersecurity will continue to be one of the key focus areas in 2024 owing to the rising instances of cyberattacks and data breach incidents,” Paliwal adds.
In 2024, the telecom capex growth is expected taper down as operators finish their 5G network buildouts and reduce their spending amid a slowdown and aggressive competition, according to Paliwal.
Did the Indian telecom sector miss to achieve anything significant in 2023? “Yes, 5G monetisation, the wider rollout of 5G standalone, and open RAN are still works in progress,” says Paliwal.
Lt. Gen. Dr S.P. Kochhar, Director General, Cellular Operators Association of India, the apex body of TSPs says, “The industry's expectations revolve around leveraging 5G for a multitude of applications and fostering an environment that takes India towards a digitally empowered future.” Kochhar hopes that the evolving regulatory landscape is expected to play a pivotal role in addressing challenges, providing a supportive framework for innovation while maintaining fair competition.
