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India - Key Statistics, Telecommunications Market and Regulatory Overview

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Last updated: 19 Oct 2015 Update History

Report Status: Archived

Report Pages: 24

Analyst: Peter Evans

Synopsis

Despite setbacks, India continues to be one of the fastest growing major telecom markets in the world. It is also one of the largest. Sweeping reforms introduced by successive Indian governments over the last decade have dramatically changed the nature of telecommunications in the country. The mobile sector had grown from around 10 million subscribers in 2002 to pass the 900 million mark in early 2012. Events in 2012 were to see a ‘correction’ in the local telecom market, but, overall, growth has been continuing. GSM technology dominates the mobile market, while CDMA manages to somehow cling to a declining market share. Growth in the mobile industry was expected to continue at least into the medium term, boosted by the allocation of 3G/4G licences and the subsequent large scale roll-out of these networks.

On the other hand the impact of the major scandal over the awarding of 2G licences in 2008 was certainly not good news for the mobile industry. Court decisions and the subsequent responses of the regulators were central to the eventual outcome. Re-auctioning of the 2G mobile licences went some way to settling the market, but much more needs to be done in this regard. By 2015 there were positive signs of a healthier regulatory environment taking shape. The government has been continuing to push to complete the restructuring of the telecommunications regulatory regime. The fixed-line market, which had grown strongly for a while, began experiencing zero and then negative growth. In terms of online access, there has been a fresh effort to promote broadband internet throughout the country; after a period in which broadband development languished, there was new hope for a serious expansion phase in this segment of the market. Mobile broadband has also impacted the market and by 2015 was already dramatically changing the internet sector.

This report presents the key measures and takes a general look at India’s telecom market together with the direction it is heading. It also considers the evolving regulatory landscape.

Key developments:

  • overall growth in India’s telecom market remains fundamentally strong; but the huge mobile market has been going through a period of uncertainty;
  • the consequences of the 2G corruption scandal have continued to impact on the industry;
  • mobile broadband services have breathed fresh life into the broadband sector, helping increase broadband penetration across the market;
  • the government removed the Foreign Direct Investment (FDI) cap on telecom investment;
  • spectrum fees continued to be a controversial issue with a major argument about the impact of the March 2015 auctions on tariffs and the financial situation of the operators;
  • India’s mobile subscriber base grew by 7% in 2014 and was growing at a similar rate in 2015;
  • mobile penetration had reached 77%, with room for further growth;
  • mobile ARPUs appeared to be stabilising and even seeing modest growth;
  • India has overhauled Japan to become the world’s third largest smartphone market;
  • new player Reliance Jio was preparing to launch its 4G network by early 2016;
  • Bharti Airtel cancelled its plans to purchase the assets and subscribers of Loop Mobile;
  • this left Loop in an impossible situation, inevitably exiting the market.

Companies mentioned in this report:

Aircel/Dishnet, Bharti Airtel, Loop Mobile (BPL Mobile), Idea/Spice, Reliance Communications, Tata Teleservices, Vodafone Essar, Uninor (Unitech), Videocon, S Tel, Bharti Telenet, Reliance Infocomm, Tata Teleservices, Sistema (Shyam Telelink), Swan Telecom, Videsh Sanchar Nigam Ltd (VSNL), Bharat Sanchar Nigam Ltd (BSNL), Mahanagar Telephone Nigam Ltd (MTNL), Videocon.

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