-- Overview - Telecom
Industry
India is the world's second-largest telecommunications market and arguably one of the
most dynamic telecom market in the world. Since 1990 (after which India opened its
gates for private foreign players) the market has changed dramatically, it has gone
through leaps and bounds but played a very imperative and indispensable role in shaping
India’s quest for digital adaption and technological upgradation.
Telecom Industry in Numbers
The India is the world's second-largest telecommunications market. The telecom market can be
split into three segments - wireless, wireline and internet services. The total subscriber base
stood at 1,209.58 million in August 2021. Tele-density of rural subscribers reached 60.27% in
August 2021, from 59.06% in August 2020, indicating potential demand growth from the rural
sector.
The total wireless or mobile telephone subscriber base increased to 1,186.72 million in August
2021, from 1,147.92 million in August 2020. The total number of internet subscribers stood at
813.5 million in August 2021. Of this subscriber base, the number of wired internet subscribers
was 24.29 million and wireless internet subscribers was 787.94 million.
India is also the second-largest country in terms of internet subscribers. India is one of the
biggest consumer of data worldwide. As per TRAI, average wireless data usage per wireless
data subscriber was 11 GB per month in FY20. App downloads in the country increased from
12.07 billion in 2017 to 19 billion in 2019 and is expected to reach 37.21 billion by 2022F. The
total wireless data usage in India grew 16.54% quarterly to reach 32,397 PB in the first quarter
of FY22. The contribution of 3G and 4G data usage to the total volume of wireless data usage
was 1.78% and 97.74%, respectively, in the third quarter of FY21. Share of 2G data usage
stood at 0.48% in the same quarter.
In July 2021, tele-density stood at 88.51%. The total number of internet subscribers increased
to 808.60 million in July 2021. The wireless subscriber base of Jio stood at 443.61 million,
Bharti Airtel (198.23 million) and Vodafone Idea (119.63 million), as of July 2021.
Data taken from Indian Brand Equity Foundation (IBEF) and TRAI
A Decadal View of the Telecom Industry
As prevalent from above illustrations that entry of Reliance Jio was significant turning point for
telecom industry in India. Entry of Jio redefined the whole cycle of for telecom companies
ranging from ARPU, diversification in terms of product offering to transition towards 4G.
Two prominent changes experienced in telecom industry in this decade:
Customer now have become internet data consumer, transitioning from call services
This industry has become oligopoly competition changing from being monopolistic competition
The three major private sector operators, namely Jio, Airtel and Vodafone-Idea own almost 88.4
per cent of the market. Reliance Jio has the highest market share with respect to subscribers
(33.3 per cent). Reliance Jio also held the highest share with respect to adjusted gross revenue
(32.2 per cent).
---Industry Composition and Analysis
After While COVID-19 has painted a morose economic outlook across the country, Indian
telecommunication companies (“telcos”) have largely been immune. Not only has data
consumption shown an uptick, telco services have also been critical during the pandemic for a
wide-ranging set of reasons. Their ubiquitous and utilitarian status has never had a stronger
endorsement! The Indian telco sector is now essentially a three-player market (Jio, Airtel and
VI) characterised by lofty consumer demand, fierce competition and regulatory complexity.
Add the recent investment activity from marquee investors such as Silver Lake Partners, KKR,
Facebook coupled with the grapevine of potential interest from Abu Dhabi Investment
Authority, Microsoft and Google, the sector’s dynamics all-together going to change and will be
defining its journey going forward.
PESTEL Analysis and SWOT Analysis
Porter’s Five Forces Analysis
