Year Of Growth
The telecommunication sector will continue to expand and grow in 2023 when it comes to the fifth generation (5G) rollout. In fact, 2022 was a watershed year for the communications sector which saw India join the 5G bandwagon. And all thanks to some major reforms and policy direction by the government that led to the highest ever bids during the spectrum auction of 2022. In terms of reforms, the government direction allows the telecom players zero spectrum usage charges on the spectrum they won via the auctions. Then the government also got rid of mandatory upfront payments for the spectrum winners. Operators who have won the 5G spectrum have also been allowed to surrender the spectrum after a 10-year period. The government also allowed easy payment options by increasing the number of annual installments to 20 among other policy reforms.
In July, the government had put 72,098 MHz spectrum to auction, of which 51,236 MHz (71 per cent of the total) was sold with a bid amounting to Rs 1,50,173 crore. "This is the highest-ever auction revenue proceeds received from a single auction," said a senior official in the communications ministry. Officially, the 5G services were launched in the country by the Prime Minister on October 1, 2022. As of end-November, the 5G services have been started in 50 towns across 14 states and union territories. Experts said the 5G subscriptions were expected to reach 31 million by end-2022.
"2022 has been an extraordinary year for the Indian telecommunication sector. Significant developments starting with - the spectrum auctions, abolishment of SUC, replacing the old telegraph act with the draft Indian Telecommunication Bill 2022 and the much-awaited launch of 5G services in the country, have set the stage for unlocking the next level of growth for the country," said Nitin Bansal, Managing Director, India Head-Networks, Market Area South East Asia, Oceania and India at Ericsson. As per the latest Ericsson Mobility Report, 5G subscriptions in India are expected to reach 690 million by the end of 2028. Further, 5G will represent around 53 per cent of mobile subscriptions at the end of 2028, Bansal added.
Going forward, experts predict that the enhanced Mobile Broadband (eMBB) and fixed wireless access (FWA) will be the early 5G use-cases in India. These will help address the concern of the limited fixed broadband penetration levels and improve the data experience while on the move, experts said.
Strong Growth Fundamentals
In 2022 the total telephone connections rose to 117 crore in October 2022 from 93.30 crore in March 2014, with a growth of 25.42 per cent in the said period. The number of mobile connections reached to 114.4 crore in October 2022. The tele-density which was 75.23 per cent in March 2014 has reached 84.67 per cent in October 2022. There was also an uptick in the urban telephone connections that rose to 64.99 crore in October 2022 from 55.52 crore in March 2014, a growth of 17.06 per cent while the growth in rural telephone connections was 37.69 per cent, which is double of the urban increase, rising from 37.78 crore in March 2014 to 52.02 crore in October 2022. The rural tele-density too jumped from 44 per cent in March 2014 to 57.91 per cent in October 2022.
Internet connections saw a huge jump in the last eight years. It jumped from 25.15 crore in March 2014 to 83.69 crore in June 2022, thereby registering a growth of 232 per cent. Broadband connections rose from 6.1 crore in March 2014 to 81.62 crore in September 2022, growing by 1238 per cent, data from the ministry of communications stated.
The average revenue realisation per subscriber per GB wireless data reduced to Rs 10.29 in June 2022 from Rs 268.97 in December 2014, a reduction of more than 96.17 per cent. This shows that with time and increased broadband penetration, the cost has been on a massive decline over the past eight years whereas the average monthly data consumption per wireless data subscriber has been growing at a phenomenal rate of 266 times to 16.40 GB in June 2022 from 61.66 MB in March 2014. This momentum will continue well into 2023 as 5G services penetrate more towns and districts while 4G connectivity is also improved.
Watch Out in 2023
We expect a new legal framework in the telecom sector as and when the Indian Telecommunication Bill, 2022 gets introduced and passed in the Parliament. It will replace over a century-old Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950.
ashish.sinha@businessworld.in
