Amidst unfolding intense competition in the mobile data market, an ASSOCHAM-KPMG Paper expects a slew of data based services by the leading telecom operators even as the high speed 4G connections would account for 17 per cent of the total user base by 2020 with revenue in the range of Rs 80,000 crore.
The entire business mix of the telecom industry is going to witness a sea change. The unveiling of 4G on a large scale by one of the largest corporate houses, is going to be a major development. 4G is expected to “significantly transform the revenue mix of service providers with estimated Long Term Evolution (LTE) revenues expected to reach Rs 79,580 crore in the next few years.
The ASSOCHAM-KPMG Paper on Powering Digital India said the demand for high speed internet services would receive a further push from key governmental initiatives such as ‘Digital India,‘ Smart Cities’. Besides mobile networks have been identified as key tools for financial inclusion where 4G can facilitate implementation of government’s social sector schemes in a faster and secure way. “As a result, data traffic in India is expected to grow rapidly”.
It said the telecom sector in India is at an inflexion point, where it is poised not only to ride a high growth trajectory but also to provide a strong impetus to the government’s key development initiatives. However, the paper also sounded a word of caution. “While demand growth is expected to remain steady on the back of affordable smart phones, digital inclusion programs and 4G rollouts, high capital requirements and an extremely competitive scenario continue to affect the profitability of key players”.
The paper said to power the next phase of growth and to ensure that the industry achieves its true potential, “it would be important for different sections of the industry to collaborate and work towards the common objectives”.
As a keen observer of the unfolding competition and the hype around the new entrant and impact on the incumbent players, ASSOCHAM Secretary General Mr D S Rawat said, the potential in the data market has not been utilized even to the extent of one-third of its size. “There would be room for most of the established and a new player. However, the consumers would have more choices at affordable pricing”.
According to the Paper, India is the second largest mobile market with over a billion subscribers at the end of February 2016 and 608 million urban subscribers and 444 million rural subscribers. “There is a huge potential to grow in the rural sector where tele-density is still quite low at around 50 as compared to urban tele-density of over 153”.