Size and Segments of Telecom Sector in India

There are several metrics to define size of India’s telecom market. In terms of number of subscribers, India is world’s second largest telecom network with nearly 1186 million telecom subscribers in February, 2017. In terms of internet subscription, India is world’s third largest market with 391.50 million subscribers in December 2016. Currently, mobile internet is key component of Indian telecom market as seven out of eight internet users are accessing it through mobile. This trend is expected to continue due to falling rates of smart phones and low charge or free data.

India’s urban tele-density is 166.77 while rural tele-density is 55.92% in February, 2017, making the total tele-density to be around 93% in 2017. This figures has grown by leaps and bounds from 18.3% in 2007 as shown in below graphics:

Tele-density is defined as the number of telephone connections for every 100 individuals. With 70 per cent of the population staying in rural areas, the rural market would be a key growth driver in the coming years.

India’s telephone subscriber base expanded at a CAGR of 19.16 per cent, reaching 1188.5 million during FY07–17. However, the composition of the subscribers shows that mobile subscribers have led the way. The increase in teledensity has mainly been driven by the increase in mobile phones.

Different segments of Telecom Industry

There are several ways to classify the telecom industry. If we include Television broadcast, then there are four major sectors of the Indian telecommunication industry viz. telephone, internet and television. While excluding TV broadcast, the Indian telecom sector can be broadly divided into three segments viz. Mobile (wireless), Fixed Line and Internet services on the basis of services provided. On the basis of providers of services / equipments, the sector can be divided into four parts viz. Network Infrastructure companies (such as Ericson), Telecom service Providers (such as Bharati-Airtel, Vodafone, Idea, Reliance), Telecom Equipment Manufactures (such as Samsung, Nokia, Gionee etc.) and Telecom Solutions Providers (such as Tech-Mahindra, IBM India, Wipro).