The coming months will witness an competition in the mobile data market; there will be a slew of data-based services by the leading telecom operators although the high speed 4G connections would account only for 17 per cent of the total user base by 2020.
These are the findings of an ASSOCHAM-KPMG Paper on Powering Digital India, released today.
The 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 paper says the key government initiatives like Digital India and Smart Cities are likely to give the much-needed push to the demand for high speed internet services. 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, says the paper.
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, says the ASSOCHAM-KPMG paper. “But, while the 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 will continue to affect the profitability of key players,” it says.
The Paper calls for active collaboration between different sections of the industry which alone can power the next phase of growth and also ensure that the industry achieves its true potential.
“The potential in the data market has not been utilized even to the extent of one-third of its size. There is room for most of the established and new players,” says ASSOCHAM Secretary General D S Rawat. “This would benefit consumers as it is the consumer who would have more choices at affordable pricing in all this competition,” he adds.
According to the Paper, India is the second largest mobile market in the world. It had over a billion subscribers at the end of February 2016, 608 million in urban area and 444 million in rural area. “There is a huge potential to grow in the rural sector where tele-density is still quite low i.e. at around 50 as compared to urban tele-density of over 153,” says Rawat.