Narender Bansal, chairman and managing director of Intex Technologies India, has revealed his views on the key developments in the year 2016 and prospects for 2017.
The past 11 months of 2016 have been eventful for the Indian telecom industry. One of the biggest milestones was the spectrum auction that saw the Central Government garnering Rs 65,789 crore. Given the launch of 4G, the additional spectrum was necessary.
The other big events were the passage of the GST Bill and demonetization of Rs 500 and Rs 1,000 notes. With GST, finally India got united, which was living in a legacy of almost 30 different markets within the country. The country was saddled with a plethora of diverse state-level taxes and levies of around 25-30 percent – or even higher in the case of some sectors. GST ensures India emerges as one common market with no double taxation and no cascading effect of multiple levies.
On demonetization, Prime Minister Narendra Modi should be lauded for his bold move to curb black money. While there is a temporary inconvenience for everybody, numerous benefits will follow for the people, the economy and the nation in the long term. Although prepaid users and dealers are inconvenienced due to limited liquidity, these hardships are prompting many to turn to online and digital payment means.
Consequently, 2017 will bring good tidings for the telecom industry as more transactions move onto mobile platforms, increasing tele-density across the country and helping the Government’s Digital India mission. In 2017, more users will also switch to smartphones, boosting the telecom sector’s long-term growth story.
In fact, smartphone sales slowed globally. But India posted robust 23 percent year-on-year growth, reveals Counterpoint’s latest report. Despite India’s population of 1.25 billion, however, barely 250 million use smartphones, signifying the market’s tremendous growth potential. As 4G LTE penetration rises, India could have 500 million smartphone users in the next five years. Indeed, in Q1 2016, more than 45 percent of mobiles shipped were smartphones, with two-thirds being LTE-capable devices.
Thanks to the huge demand, more mobile handset makers are manufacturing these phones in India, augmenting the Government’s ‘Make in India’ initiative. Domestic production of mobiles is expected to boost GDP. Besides this, the Central Government is driving its ‘Digital India’ initiative. Therefore, the Government plans to launch a mobile app to act as the single access point for all its services.
Recently, IT Minister Ravi Shankar Prasad disclosed that in the last financial year, India attracted investments from 37 mobile manufacturers, creating 40,000 jobs directly and about 125,000 indirect employment opportunities. During this period, 110 million mobile phones were manufactured domestically, compared to 60 million in FY 2014-15. Clearly, the best years for the telecom industry are yet to come.
