With 1.2 billion subscribers, India is currently the second-largest telecom market in the world and has seen rapid expansion over the past years. The industry has increased primarily due to favourable regulatory conditions, low prices, increased accessibility, and the introduction of Mobile Number Portability (MNP), expanding 3G and 4G coverage and changing subscriber consumption patterns. In 2020-2021 the telecom industry contributed 6% to India’s Gross Domestic Product (GDP). The telecom sector is set to grow at a Compound Annual Growth Rate (CAGR) of 9.4% from 2020 to 2025. However, with a CAGR of 15.9% throughout the forecast period, the smartphone industry in India will have the fastest growth. By 2025, India’s digital economy is anticipated to be worth $ 1 trillion.
The telecom sector in India is the third largest sector in terms of Foreign Direct Investment (FDI) inflows and accounts for 6.44% of all FDI inflows. It supports 2.2 Mn jobs directly and 1.8 Mn jobs indirectly. In the telecom industry, 100% FDI is currently permitted, of which 49% can be done through an automatic route, whereas beyond this, it needs to follow the government route. The amount of FDI in the telecom sector increased by 150%, from $ 8.32 Bn to $ 20.72 Bn between 2014 and 2021. Many telecom services, including telecom infrastructure providers like Basic Cellular, United Access Services and Commercial V-Sat, have invested in the telecom industry.
The subsectors of the telecommunication sector include infrastructure, equipment, Mobile Virtual Network Operators (MNVO), white space spectrum, 5G, telephone service providers, and broadband. The Indian telecom tower market has expanded dramatically by 65% during the past seven years. It is predicted that 5G technology will boost the Indian economy by $ 450 Bn between 2023 and 2040. According to the Global System for Mobile Communications (GSMA), there is an excellent opportunity for investment in this sector as India will have almost one billion installed smartphones by 2025 and 920 million unique mobile customers, including 88 million 5G connections. This will make India the second-largest smartphone market in the world, which will increase the manufacturing, advertisement, sales and production market in India.
