Investment Opportunity in Telecom Sector in India
Telecom Industry in India is one of the largest growing sectors Contributing 6.5% approximately in the country’s GDP and providing extreme length of opportunities to investors or job-seekers or entrepreneurs.
With about 1.18 Billion subscriber base, India as for now has more than 620 Million smartphone users at present. The sector currently provides employment to 4 Million people approximately. The sector has been categorized into the following seven subsectors namely-
- Broadband Network
- Mobile Virtual Network Operators (MNVO)
- Telephone Service Providers
- White Space Spectrum
With only 3 to 4 major players in this sector in India, it provides huge opportunity to foreign players for making investment in this sector by opting for company registration in India..
The foreign players can start business presence in the form of subsidiary company registration in India wherein parent foreign company can acquire majority shares of Indian company and invest in telecom sector.
Another option is to enter into Joint venture with an existing company in India. Here, the route of a new private limited company registration or public limited company registration will be taken wherein both foreign company and existing Indian company will hold shares and such new company will make further investment.
The Global System for Mobile communications Association (GSMA) has estimated that by the year 2025, India will become the second largest market for smartphones worldwide. By that time there will be about 1 Billion devices installed and about 920 Million unique subscribers for mobile will be there including 5G connections surpassing 88 Million in total.
In addition to all this, the telecom tower sector related industries has been growing significantly in last 13 years. On average about 29000 new towers were built or installed every year. Also, the Department of Telecommunications (DoT) has aimed at rolling out about 50 Lakh KM of the optic fiber in the whole country by the year 2024. It also targets to provide 50 Mbps average broadband speed to the users by the same year.
Status of Foreign Direct Investment in Telecom Sector:
As per the Indian FDI Policy, 100% foreign investments can be made in the telecom sector. Out of this up to 49% investment is allowed through Automatic Route and above 49% is allowed through the Government Approval Route.
Looking in the past 20 years, the inflow of FDI in the sector was 37.27 Billion USD approximately, providing more opportunities to foreign companies for company registration in India and makinginvestment in the telecommunication field. In the last five years, 20.5 Billion USD FDI inflow was observed.
The following areas of the Telecom Sector are the ones that have received the maximum investments-
- 4G and 5G data speed and reliability
- Being the second rank in the startup ecosystem, more investments have been put up in the startups in this sector operating in the EDUTECH, FINTECH, HEALTHTEC, E-Commerce and many others.
- Cloud computing
- Mobile and smartphone manufacturing
- New technologies such as Internet of Things (IoT)
- Digital Content and OTT
Future of Telecom Sector in India:
India is expected to become the fastest growing telecom market in the world by the year 2023 with the 11% annual growth rate. The revenue from the telecom equipment sectoris expected to grow to about 26.38 Billion USD, which is quite massive owing to the large population of the country.
The Government of India has the following future plans for the Telecom Sector-
- It is aspiring to become the second largest smartphone market in the world by the year 2025.
- The telecom sector is under the priority list of sectors in which the government seeks more investmentsin future.
- Using the Internet of Things (IoT) as the key model, it is planning on a project to develop 100 smart cities across the country.
- The application downloading market is expected to increase to a whopping 37.21 Billion in 2022 from the 18.11 Billion in 2018.
Thus, it is evident from above that there is a huge opportunity of investment in Telecom sector in India.