How telecom industry is being affected by macroeconomic factors and by current situation of Indian economy using some statistical analysis.

1. MACROECONOMIC FACTORS
AFFECTING TELECOM INDUSTRY

2. •India is currently the world’s second-largest telecommunications market with a
subscriber base of 1.20 billion and has registered strong growth in the past decade
and half.
•As of January 2019, India has witnessed a 165 per cent growth in app downloads in
the past two years.
•The liberal and reformist policies of the Government of India have been instrumental
along with strong consumer demand in the rapid growth in the Indian telecom sector
•With 604.21 million internet subscribers, as of December 2018, India ranks as the
world’s second largest market in terms of total internet users.
•Further, India is also the world’s second largest telecommunications market, with total
subscriber base of 1,183.51 million at the end of March 2019
•The telecommunications sector consists of three basic sub-sectors: telecom
equipment (the largest), telecom services (next largest) and wireless communication.
Telecom is growing less about voice and increasingly about video, text, and data.
INTRODUCTION TO TELECOM INDUSTRY

3. MAJOR PLAYERS

4. FACTORS AFFECTING
TELECOM INDUSTRY

5. ● Increased personal disposable income -> greater purchasing power -> greater
network usage
● As per Economic Times, 10% rise in internet usage leads to 1.3% increase in
GDP but in India last year, a similar rise in internet led to about 3.3.% growth in
GDP.
PERSONAL DISPOSABLE INCOME

6. ➢ Any fall in the interest rates will lead to greater investment by the businesses
in the telecom industry.
➢ The government says carriers haven’t invested enough in their networks to
keep pace with their surging data-hungry subscriber growth.
➢ Quality of service has been a burning issue for telcos who have faced
immense pressure from the government and consumers to improve their
offerings, especially call services
INTEREST RATE

7. Increasing Subscriber Base
● As on March 2019, number of telecom subscribers was 1186.63 million
in India.
● Reliance Jio dominates the market having subscriber base of 348
million(highest growth) followed by Bharti airtel at 327 million (losing
subscribers) and Vodafone Idea at 375 million(losing subscribers) .
1186.63
1163.13
1120
1140
1160
1180
1200
1220
Total Subscribers Wireless Subcriberes
(98.02%)
inmillion
Subscribers
Number of wireless subscribers
1186.63
499.45
0
500
1000
1500
Total
Subscribers
Rural users
(42.09%)
inmillions
Subscribers
Rural Subscribers

8. FDI Inflows
● In December, 2017, Indian Govt. changes the policy to 100
percent FDI in Telecom Industry for the growth purpose.
● However, FDI Inflows in telecom sector has plunged to $2.66
billion in FY’19 from $6.21 billion in FY’18.
● Reasons are Jio domination which led to exit of foreign networks
and also, the increase of stressed assets in Bharti Airtel and
Vodafone Idea ( a debt of Rs 8 lakh-crore)

9. UPCOMING 5G TECHNOLOGY
● 5G network makes higher transfer speed and lower network
latency possible.
● Improves connectivity and communication significantly.
● Would bring in era of interconnected smart devices on massive
scale.
● Indian government plans to make India 5G-ready by 2020
● GDP is estimated to reach 8.2% by 2020 by leveraging 5G
technology.
● Upcoming 5G technologies is set to contribute to global economy
as well by $2.2 trillion over next 15 years.
source : economictimes.com

10. INFLATION
● Inflation unfavourably effects telecom spending.
● Households spends less on telecommunication devices and
services due to lesser purchasing power.
● Slump in performance of telecom companies.

11. POLITICAL FACTORS
● The traditional political risks for telecom are the ones related to
regulations, network licensing, national radio spectrums and in
case of certain nations trade barriers.
● Favourable factor : privatization and deregulation
● The telecom industry enjoyed relative freedom based upon its
importance in the process of globalization
● Increased focus is on the growing markets like China and India.
● The Government of India aims to develop the nation as a global
telecommunication hub.

12. SOCIAL FACTORS
● Horizontal Growth is Limited
● Telecommunication corporations are monopolies
● Telecommunication has become a vastly important aspect of
daily life of the average person.
● China is now the world’s largest telecom market and according
to analysts’ figures, there are more than 1.25 million cellular
subscribers signing up every week .

13. FUTURE OF TELECOM INDUSTRY
● The 5G Factor: The introduction of 5G will change how the
telecom operators earn their revenue.
● For example, Right now only 30% of their net revenue comes from
enterprises, it is expected to grow to 70% once 5G is introduced.
● The Population Growth: Although the operators are on loss, the
silver lining is that there is an average 9% annual growth rate of
subscriber base.
● The Data Usage: The population of internet subscribers is
expected to double by 2021 to 829 million, which has already
trumped the traditional voice-based revenue stream.
● Further, the telecom operators are trying to monetise through
content to streamline data users.

14. THANK YOU
&
ENJOY THE
UPCOMING 5G