India - Telecoms, Mobile and Broadband - Statistics and Analyses

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Last updated: 27 Jul 2020 Update History

Report Pages: 168

Analyst: Sebastien De Rosbo

India’s stressed mobile sector gains investor interest

The mobile market continues to be the main focus of India’s telecom sector, securing the bulk of operator capex. There is also considerable government investment in national infrastructure, including the BharatNet project which aims to connect 250,000 villages to broadband networks, of which 100,000 are expected to be connected with FttP services by the end of 2020.

Although there is continuing major expansion of operator network infrastructure, the main MNOs have been under financial stress caused by competitive pressure on pricing as well as the high Adjusted Gross Revenue charges. This has obliged the operators to raise revenue from outside investors, while Vodafone Idea has had to be bailed out by its two main shareholders to avoid bankruptcy. By mid-2020 the huge investments made by a number of private equity funds, as well as global operators including Facebook and Google, had dramatically demonstrated confidence in the world’s second largest market.

The recent financial difficulties of the main MNOs caused the government to delay the multi-spectrum auction, which is now expected to be held by late 2020. This will have knock-on effects on the availability and reach of 5G services in coming years. Compounding difficulties for the MNOs is government disapproval of the MNOs relying too heavily on Chinese vendors, a result of recent political disagreements exacerbated by border disputes in the far north.

India’s fixed-line and fixed broadband sectors remain highly under-developed, largely due to the dominance of the mobile platform and the relatively limited extent of fixed infrastructure.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key Developments

  • India takes additional steps towards the delayed 5G spectrum auction;
  • BSNL partners with Ciena to trial 5G;
  • Submarine cable linking mainland to the Andaman and Nicobar Islands expected to be completed by end-2020;
  • Report update includes the regulator’s market data to March 2020, telcos’ operating and financial results to Q1 2020, Telecom Maturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector, recent market developments.

Key companies mentioned in this report:

Aircel, Bharti Airtel, Loop Mobile (BPL Mobile), Vodafone Idea, Reliance Communications, Tata Teleservices, Videocon, S Tel, Bharti Telenet, Reliance Infocomm, Tata Teleservices, Sistema (Shyam Telelink), Swan Telecom, Videsh Sanchar Nigam (VSNL), Bharat Sanchar Nigam (BSNL), Mahanagar Telephone Nigam (MTNL), Spectra, Reliance Jio Infocomm (RJI), Sistema

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