Essay: Telecommunications trends in India

Executive summary

India is the world’s second-largest telecommunications market, with 957.61million subscribers by the

end of FY14. It stood third-highest in terms of total internet users in 2014, with 254.40 million internet

subscriptions.

 

The acceleration of internet growth in India can be gauged from the fact that India took 10 years to

move from 10 to 100 million. It took 3 years to move from 100 to 200 million, whereas the next 100

million (from 200 to 300M) milestone was achieved in just 1 year. Even if the same growth is

maintained, India will reach??500 million users before end of 2016. 4G will be the future of India.

Increasing income has been a key determinant of demand growth in the telecommunication sector in

India. The IMF forecasts income to expand at a CAGR of 5.7 per cent during 2013-18.

The Government of India plans to cut license fees by up to 33 per cent for operators that cover services

for more than 95 per cent of the residential areas in a calling circle. The Department of Information

Technology intends to set up over one million internet-enabled common service centers across India as

per the National e-Governance Plan.

 

The mobile application (app) market is expected to expand at a CAGR of 70.4 per cent to US$ 100 billion

during 2012-15. The segment’s growth is expected to be driven by increasing mobile connections and

availability of low-range smartphones.

 

In the wearable’s space, Indian consumers have shown most interest in buying fitness monitors (80%),

smart watches (76%) and internet-enabled eyeglasses (74%). Price points are expected to go down with

Chinese and local manufacturing.

 

The major trends to look out for in telecommunication industry in India in 2015 are:’?? The obvious upcoming force is 4G-LTE

 

‘ Smart Wearable Technology

‘ Public Wi-Fi to penetrate ; wired broadband to remain work-in progress

‘ Resolution of spectrum issues and intense competition foreseen in the telecom industry due

to delayed M&A activities

‘ Internet of Things

 

Availability of affordable smartphones and lower rates are expected to drive growth in the Indian

telecom industry. Telecom penetration in the nation’s rural market is expected to increase to 70 per

cent by 2017 from 41.0 per cent as of March 2013. India is expected to become the second-largest

internet market in 2014.

 

The government has been proactive in its efforts to transform India into a global telecommunication

hub; prudent regulatory support has also helped.

 

Top 5 Trends to look out for in telecommunication industry in India in 2015

The obvious upcoming force is 4G-LTE: In 2015, we will witness multiple Indian players launching 4G on

a more efficient 1800 MHz spectrum. Indian subscribers will accept 4G enthusiastically to gratify their

need for mobile data. 4G LTE subscribers are expected to reach 10 million to 15 million by December

2015 driven by competitive pricing, superior network experience and affordable smartphones.

Smart Wearable Technology: In the wearable’s space, Indian consumers have shown most interest in

buying fitness monitors (80%), smart watches (76%) and internet-enabled eyeglasses (74%). Price points

are expected to go down with Chinese and local manufacturing.

Public Wi-Fi to penetrate ; wired broadband to remain work-in progress: India is expected to see

a considerable surge in Wi-Fi hotspots driven by both the government ‘smart cities’ and ‘digital India’ as

well as private sector initiatives. Wired broadband, however, for retail consumers is likely to remain

work-in-progress by the end of 2015.

Resolution of spectrum issues and intense competition foreseen in the telecom industry due to

delayed M&A activities: Current M&A guidelines have not been able to encourage any consolidation in

the sector despite all policymakers expressing the need for it. With new network launches the rapidly

growing data market is expected to observe intense price competition and will revive the memories of

2010 voice-led price wars.

Internet of Things: The Interconnection of devices via embedded apps which communicate over the

internet. It is supposed to be the next big boom in the industry that a device next to you connects with

devices miles away and does some work which can be a routine work of a pending task.

Detailed Report

1. The obvious upcoming force is 4G-LTE.

Some facts on Telecom industry ‘ The Big Picture

‘ Telephone subscribers in India increased to 957.61 million at the end of Sep-14.This reflects

year-on-year (Y-O-Y) growth of 6.42%.

Particulars Wireless Wired Total (Wireless+

Total Telephone Subscribers (Million) 930.20 27.41 957.61

Urban Telephone Subscribers (Million) 547.70 21.85 569.56

Rural Telephone Subscribers (Million) 382.50 5.55 388.05

Overall Tele-density 74.55 2.20 76.75

Share of Urban Subscribers 58.88% 79.74% 59.48%

Share of Rural Subscribers 41.12% 20.26% 40.52%

Broadband Subscribers (Million) 60.61 15.13 75.73

‘ Drilling down further. Of the total population:

Source: http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/PR-TSD-Sep-14.pdf

Total Internet Subscribers 254.40 Million

Broadband subscribers 75.73 Million

Wireless Internet Subscribers 235.70 Million

‘ Internet subscribers increased by 6.44% from 2013. Past trend of Internet subscription is as follows.

‘ The number of Internet subscribers

increased at a CAGR of 60.8 per cent

to 239 million in 2013 from .9 million

These stats portray the increasing

telecom density with increasing Total

wireless and internet subscribers.

Further Smartphone facts are listed

‘ Growing at 89 percent year-on-year

Smartphone growth in urban India

has taken off 51 million people in

urban India were using Smartphone

http://www.nielsen.com/in/en/insights/r

eports/2014/unstoppable–smartphone-

surge-in-india-continues.html

‘ 116 million Smartphone users in

India of them 51 million in urban

India. Rising 3G connection trend

point at the growing market size

‘ Online activity time spend: services (23%)/ social networking (25%)/ entertainment (11%)/ retail

(3%) / news + information (3%) / all other (35%)

‘ 27% increase in the Indian online video audience over a year and 427% increase in tablet sales in

India with 51% users spending more than 2 hours a day on tablet

‘ 31.5 million users watched videos on Google sites (YouTube)

‘ The acceleration of internet growth in India can be gauged from the fact that India took 10 years

to move from 10 to 100 million. It took 3 years to move from 100 to 200 million, whereas the

next 100 million (from 200 to 300M) milestone was achieved in just 1 year. Even if the same

growth is maintained, India will reach??500 million users before end of 2016.

‘ According to the report around 173 million or 57 percent of Indian internet users’ access

internet from their mobile phones. The percent of mobile internet users has grown more rapidly

than traditional broadband users. 49 million new mobile internet users have been added during

Oct 2013 to Oct 2014.

‘ The 4G Internet service is currently estimated at just .5 million subscribers due to the availability

of 4G services in selected location, high cost and limited number of players. It is estimated that

the number of 4G users will increase from 0.5 million users to 10-15 million users in 2015 as per

‘ The above assumption also can be justified with the ever growing number of players in the field

like Reliance Jio, Airtel, Aircel and Tikona also plans to launch its LTE network soon. Also based

on above stats and growing market size this looks not even possible but it might exceed the

stated figures.

2. Smart Wearable Technology

The technology advanced to become a part of us in the form of wearable will be the next big hype. Be it

personal, social or business use it has its benefits in each domain. These can be worn by the user and

has features if tracking information related to health, social activities and emails or even your

environment.

The wearable health devices market in India is pegged at Rs.25 crores in 2014, and expected to touch

one million units in 2015 in India compared with the US, which stands at $1 billion touching eight million

units in 2014.

Source: Essay UK - http://doghouse.net/essays/information-technology/essay-telecommunications-trends-in-india/


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