Telecoms Infrastructure, Operators, Regulations in India

Despite setbacks, India continues to be one of the fastest growing major telecom markets in the world. It is also one of the largest. Sweeping reforms introduced by successive Indian governments over the last decade have dramatically changed the nature of telecommunications in the country. By 2016 there were positive signs of a healthier regulatory environment taking shape. The government has been continuing to push to complete the restructuring of the telecommunications regulatory regime.

India’s mobile market continues to get the bulk of local capital expenditure as the operators expand their infrastructure. The mobile market continues to be the main focus of the Indian telecom sector. India has a huge national telecommunications network. The fixed line market in India remains highly underdeveloped due to the dominance of the mobile segment. Further, the number of fixed telephone lines is slowly declining as the mobile segment continues to expand. Overall penetration dropped from 2.1% in 2014 to 2.0% in 2015 and 1.9% in 2016.

With fixed-line penetration falling below 3%, the country has nevertheless achieved a remarkable coverage, 99% of the population having some form of access to a telephone. There has been heavy investment in telecoms infrastructure over the last decade to service the huge population. The government and the operators push forward on a number of fronts to speed up the roll-out of services to the wider population. Market leader BSNL’s market share has dropped significantly over the past six years due to growing market competition and the entry of new players in the market such as Vodafone.

In 2016 Vodafone signed an agreement to acquire cable broadband provider YOU Broadband for INR4 billion (USD59.9 million). The acquisition is part of Vodafone’s strategy of increasing its presence in the fixed broadband market. The takeover is expected to strengthen its mobile data services.
There has been a fresh effort to promote broadband throughout the country; after a period in which broadband development languished, and there is now hope for a serious expansion phase in this segment of the market. Mobile broadband has also impacted the market and by 2016 was already dramatically changing the internet sector.

Key developments:
a national optical fibre network (NOFN) project has been launched;
the total number of connected villages’ in India has passed 99%;
the Indian government spun out the Department of Electronics and Information Technology (DeitY) from the Ministry of Communications
India’s Telecom Commission approved the introduction of a new category of unified licence, virtual network operators (VNOs).
The TRAI published new regulations on net neutrality, prohibiting operators from providing discriminatory tariffs based on content.
Vodafone signed an agreement to acquire cable broadband provider YOU Broadband for INR4 billion (USD59.9 million).

Companies mentioned in this report:
Aircel/Dishnet, Bharti Airtel, Loop Mobile (BPL Mobile), Idea, Reliance Communications, Tata Teleservices, Vodafone Essar, Uninor (Unitech), Videocon, S Tel, Bharti Telenet, Reliance Infocomm, Tata Teleservices, Sistema (Shyam Telelink), Swan Telecom, Videsh Sanchar Nigam Ltd (VSNL), Bharat Sanchar Nigam Ltd (BSNL), Mahanagar Telephone Nigam Ltd (MTNL), Videocon.

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