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FDI In Telecommunications Sectors

India is currently the world’s 2nd largest telecommunications market with a subscriber base of 1.2 billion and has registered strong growth in the past decade and half. The industry has witnessed exponential growth over the last few years primarily driven by affordable tariffs, wider availability, roll out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers and a conducive regulatory environment.

The number of smartphone users in India crossed the 300 million mark in 2016, making it the largest smartphone market in the world. Total number of Subscriber Identity Module (SIM) connections is expected to reach 1.4 billion by 2020 from 1.1 billion in 2017. The Indian mobile economy is growing rapidly and will contribute substantially to India’s Gross Domestic Product (GDP), according to report prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group (BCG). As of January 2019, India has witnessed a 165% growth in app downloads in the past two years.

100% FDI in telecommunications sector is allowed in the Telecom, wherein upto 49% is allowed through the automatic route and beyond 49% FDI in telecom sector under government route.

 

 

 

  • 1

    Indian Mobile Industry contributed over $140 bn to India’s GDP in 2015

  • 2

    Digital India is expected to create $1 trillion business opportunity by 2020

  • 3

    Number of internet users in India is expected to reach 829 million by 2021

The Telecommunications industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband

With 560.01 million internet subscribers, as of September 2018, India ranks as the world’s #2nd largest market in terms of total internet users

In 2017, India surpassed USA to become the second largest market in terms of number of app downloads. The country remained as the world’s fastest growing market for Google Play downloads in the second and third quarter of 2018

Telecom tower in India is set to boom as its tenancy ration will increase from 1.95 times in 2016 to 2.9 times by 2020 due to the expansion of 3G and 4G and the onset of 5G technologies

Over the next 5 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

  • Growing demand

    Nominal per capita income recorded a CAGR of 10.4% during 2012-17
  • Increasing internet revenues

    Mobile value-added service industry expanded at a CAGR of 29.3% to reach $ 11.08 bn in 2016
  • Increased equipment manufacturing

    38 new mobile manufacturing units have been set up in India since September 2015
  • Make in India

    The government announced Phased Manufacturing Program (PMP) to promote domestic production of mobile handsets
  • Bharatnet project

    Optical fiber cables laid over 100,000 gram panchayats
  1. Dec 2018: Chinese smartphone maker Vivo plans to invest INR 4,000 cr in India to setup a new manufacturing plant, and expand its existing functions.
  2. Sep 2018: Vodafone India and Idea Cellular have merged into ‘Vodafone Idea’ to become India’s largest telecom company.
  3. Jul 2018: The number of mobile wallet transaction increased 5% month-on-month to 325.28 million in July 2018.
  4. June 2018: BSNL is expected to launch its 5G services by 2020.
  5. Apr 2018: Bharti Airtel is planning to launch 6,000 new sites and 2,000 km of optical fiber in Gujarat in 2018-19.

  • $32.8 bn Foreign Direct Investment in telecommunication sector during April 2000 – March 2019
  • $5.6 bn FDI inflows in telecommunications during April 2016 - March 2017
  • 100% FDI is allowed in telecom sector (of this upto 49% is allowed through the automatic route and beyond 49% under government route)
  • 15.99 % Share in total FDI inflows in India encouraged by FDI policy in telecom

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