Accelerated Growth Expected

The sector has been in turbulent phase for nearly couple of years, marked by legality of 3G roaming agreements, one-time spectrum cost and reframing of allotted spectrum in the 900 MHz band. However, outlook for India’s telecom industry is positive as the sector is in transformational phase. With mobile penetration in all of urban India well over 100%, the airwaves on offer across all bands were used solely to drive up data consumption.

In our view, 2014-15 may witness even more accelerated growth, thanks to the impeding launch of 4G services and other vendors who got spectrum licensees earlier this year. Various policy initiatives by the Indian government have led to a complete transformation of the Indian telecommunication industry. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch $37 bn in 2017, registering a compound annual growth rate (CAGR) of 5.2 percent, according to research firm IDC.

Key factors, which will fuel the growth of the sector include increased access to services owing to launch of newer telecom technologies like 4G and BWA, better devices, changing consumer behavior and the emergence of cloud technologies. The challenges before any operator currently are multi-fold and broadly include-an overcrowded industry, technological parity between players and low switching costs from one operator to another.

Digital interruption is set to be the norm across industries as they look to transform to keep their business relevant amidst the ever changing technological landscape.