Capex investment of Indian telecom operators will be $35 billion during 2016-2020, said ASSOCHAM-KPMG joint study.
Indian telecoms such as Bharti Airtel, BSNL, Idea Cellular, Vodafone, Reliance Jio, Aircel, Reliance Communications are aiming for investment to tap the growth in mobile Internet users across the country.
The report said data growth will be driving operator revenues from $31 billion in 2016 to $39.7 billion in 2020.
India IOT solutions market to reach $15 billion by 2020 with 2.7 billion units of connected devices from the current $5.6 billion with 200 million units of connected devices in 2016.
India telecom sector is likely to increase job opportunities by 30 lakhs by 2018, according to an ASSOCHAM-KPMG joint study.
Total number of SIM connections is expected to reach 1.4 billion by 2020 from the current 1.1 billion.
With 646 million unique mobile subscribers, India is the second largest mobile market in the world and will add more than 300 million new unique subscribers by 2020.
Telecom sector contribution to GDP will reach 8.2 percent by 2020.
Smart phone subscriptions will reach 674 million by 2020.
Wearable device market is expected to grow from 2.5 million units in 2016 to 4.1 million units in 2020.
Emerging technologies such as 5G, M2M and the evolution of Information and Communications Technology (ICT) are expected to create employment avenues for almost 870,000 individuals by 2021.
The existing manpower in the sector may not be adequate both in number as well as in skill to cater to the upcoming demand. There is a need to create skilled manpower in diverse roles such as infra and cyber security experts, application developers, sales executives, infrastructure technicians, handset technicians etc.
Roll out of 4G technology with an increase in data, entry of new players in the market, introduction of digital wallets, popularity of smart phone will create job opportunities.
The telecom sector has grown at 19.6 percent CAGR in terms of subscriber base and at 7.07 percent CAGR from a revenue perspective over the last few years.
Indian telecom operators continued their investment in their networks and modernize their existing network infrastructure. Operators Capex investments stands at INR 85,003 crore during Q1 2017 and the figure depicts the significant Capex investment during the period 2012- 2016.
Mobile operators made Capex investments primarily to deploy new technologies like 4G and 4G-Advanced, to expand their fibre footprint and to acquire spectrum via spectrum auctions. These investments have resulted in increased borrowings for the TSPs and hence led to an increase in debt burden for the operators, resulting in highly leveraged TSP balance sheets.
The increased debt burden on operators coupled with pressure on profitability affected the financial health of the telecom sector. Initiatives from the government to enhance the health of the telecom sector and enable a cost efficient expansion of digital services are required.
By the end of 2016 the number of internet subscribers in India was 391.50 million making India globally the second highest in terms of internet users.
Mobile data traffic grew by 76 percent in India in 2016 primarily attributed to increased smart phone penetration. In 2016, 559 megabytes of mobile data was generated per month by an average smart phone, up from 430 megabytes per month in 2015. Consumption of video content is forecast to be 75 percent of India’s mobile data traffic by 2021, compared to 49 percent in 2016.
Advancements in innovative IoT technologies, like health monitors, smart transport, smart meters among others, is projected to result in 21 percent increase in M2M services. These advances will result in a significant growth of mobile data, and as the telecom sector moves to newer technologies, TSPs will need to identify innovative avenues to monetise this data opportunity.