India Telecoms Industry Report – 2021-2026

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This report provides analyses of revenue and market forecasts as well as statistics of the Indian telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure and also features the following:

  • Overall Telecommunications Market by Major Operators
  • Telco Operators Profile, Revenue and EBITDA Mix
  • Mobile Subscribers & Revenue Market Overview and Forecasts
  • Spectrum Holdings
  • IoT Market Overview
  • Broadband Subscribers & Revenue Market Overview and Forecasts
  • Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
  • Telecom Tower Market Analysis and Forecast
  • Thematics / Opportunities relating to 5G, M&A and e-Commerce
  • Telco M&A Transaction Database

About this report:
2nd Edition
Pages: 99
Author: Landry Fevre
Publication Date: October 2021
License: Single User PDF

Description

WHY YOU SHOULD BUY THE INDIA TELECOMS INDUSTRY REPORT:

  • Benefit from the latest market opportunities
  • Understand the threats to your operations and investments and protect your company against future risks
  • Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market
  • Get a full view of the competitive landscape to assess your market position.
  • Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
  • Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles

The India Telecommunications Industry Report, 2021-2026 includes a comprehensive review of the Indian market dynamics, market sizing, market forecasts, analysis, insights and key trends.

EXECUTIVE SUMMARY

India Telecoms Industry Report at a Glance

Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. Idem Est Research expects the Indian telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to the COVID-19 pandemic.

Growing mobile phone penetration and emerging fixed broadband take-up among households will fuel future growth over the next five years.

According to our India Telecoms ReportIdem Est Research forecasts that mobile subscriptions and fixed broadband subscribers will continue to fuel the telecoms sector growth in the 2021-26 period. More than 700m people became Internet users over the last in six years and another 600m more Internet users are expected to come online over the next six years by 2026.

Following the market expansion over the last 5 years, Idem Est Research forecasts sustained revenue growth to 2026, despite the Covid-19 pandemic and the diminishing impact of declining legacy voice and SMS revenue.

Mobile subscriptions ares growing faster than mobile service revenue leading to ARPU decline after 3 years of intense competition with the market transitioning to 4G. With a market entry in late 2016, Jio jolted the mobile market from a standing start to becoming the largest mobile operator by the subscriber and third-largest by revenue in just three years.

Reliance Jio launch strategy was to offer three months of free data and free voice, and once that was up, kept the free voice offering permanent while charging only a low price for mobile data (INR50 for 1GB). This strategy is reminiscent to the classic Silicon Valley bet: spend money upfront to acquire customers, then make it up on volume because of a superior cost structure enabled by its 4G only network and the near-zero-marginal cost nature of technology. Jio’s launch timing was perfect just at the time when competitors had sputtering 4G networks, it offered free Internet to a nation and demographics that could not afford it and increased its addressable market while its competitors were still relying on legacy voice and SMS revenue. Mobile network competitors quickly struggled to compete and a massive wave of consolidation ensued.

Idem Est Research expects the overall telecoms market to grow again through to 2026 after a marked decline from 2017 and 2018 due to a mobile war.

Capex Investments
The Capex from Indian operators is highly cyclical with mobile rollout leading to investments in line with the operators’ top-line growth. Capex investments peaked between 2016 and 2018 while Jio built its 4G mobile network and is declining to lower level in 2021 and will increase again  from 2022 through to 2025, as mobile operators invest in 5G, bolster their 4G coverage and increase capacity to fulfil strong data demand. The Capex to GDP ratio spiked between 2015 and 2017 and its started to slide from 2018 onwards.

Operator Profiles
Most operators lost revenue  and EBITDA share to Jio in 2017 and 2018 and Bharti Airtel started to recover in 2019 with price rises across the market. Vodafone Idea lost both revenue and EBITDA share while merging and cost reduction measures started to flow in 2019 with improving EBITDA and cash flow.

The wave of market consolidation followed by Jio’s market entry and the intense pricing competition should subside with a market of three large operators with high debt loads, all now focusing on a strategy of profitable growth in the mobile market.

Mobile Subscribers and Revenue

The mobile telecoms sector began consolidating two years ago, with twelve operators in 2017, India has now only four mobile network operators with nationwide across all 22 circles; Bharti Airtel, Vodafone Idea, Reliance Jio and BSNL/MTNL.

Average annual mobile revenue growth was lower than mobile service subscriptions growth during the period 2014-2020 highlighting the intense price war since Jio’s market putting pressure on ARPU compounded by a reduction of dual-SIM cards feature, driving the low growth in mobile subscriptions. The 4G migration leapfrogged by Jio and followed by Vodafone Idea and Bharti Airtel is driving the growth in higher ARPU for operators with the mobile market consolidation now largely complete.

According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive.

Broadband Subscribers – FTTH Push and Fixed Wireless

The fixed broadband market is experiencing slow-growth mostly driven by the loss of share by the incumbent BSNL, followed by Bharti Airtel, Atria Convergence Technologies (ATC), Reliance Jio (including Den Networks and Hathway Cable), Vodafone Idea via its subsidiary You Broadband, all are now investing in full-fibre networks.

However, more competition is expected in the fixed broadband market with Jio’s entry with its residential fibre broadband services likely to disrupt incumbent BSNL but also should increase the residential broadband subscriptions significantly.

Fixed broadband penetration is forecasted to grow modestly as India’s investments on full-fibre networks are slowly taking off with affordable packages and increased broadband household penetration growing.

ThematicsTelecoms Infrastructure / 5G / M&A / Infrastructure

Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

Our India Telecoms Industry Report transactions database analysis highlights the hive of transactions in the India tower market, with the majority of telecommunications operators shifting assets to infrastructure entities and selling down to repay debts and further investments for capacity and coverage of their mobile networks. However, in the short to medium term, the telco sector is likely to experience some corporate activity with the fixed broadband market, now expected to come under pressure with JioFiber’s launch and also broaden the scope of services beyond carriage to content and e-Commerce. Idem Est Research projects strong earnings growth despite the huge debt pile and the looming required 5G and fibre to the home investments by the telecommunications operators. A new wave of M&A, network sharing deals over the next two to three 3 years will continue to consolidate around the large mobile operators, Bharti Airtel, Vodafone Idea and Reliance Jio.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

KEY COMPANIES MENTIONED IN THIS INDIA TELECOMS INDUSTRY REPORT:
American Tower Corporation (ATC), Atria Convergence Technologies (ACT), Bharti Airtel, Bharat Sanchar Nigam Limited (BSNL), Den Networks, GTL Infrastructure, Hathway Cable, Mahanagar Telephone Nigam Limited (MTNL), Reliance Communications (RCom), Reliance Jio, Sify, Tata Communications, Vodafone Idea

India Telecoms Industry Report – Table of Contents

1       Key Statistics
1.1        India Population
1.2        India’s Economy
1.3        India’s GDP

2       COVID-19 Impact

3       Overall India Telecommunications Market, 2014–2026
3.1        Market Overview
3.2        Historical Telecommunications Market Revenue, 2014-2020
3.3        Overall Telecommunications Market Forecast, 2019-2026
3.4        Telecommunications Market Capital Expenditure, 2014-2026
3.4.1      Historical Telecommunications Capex Spend, 2014-2020
3.4.2      Capex to Revenue Country Benchmark
3.4.3      Capex to GDP Benchmark
3.4.4      Telecommunications Capex Spend Forecast, 2019-2026

4       India Telecommunications Operators Profile
4.1        Bharti Airtel Profile
4.1.1      Bharti Airtel Revenue, EBITDA and Capex Mix, 2014-2020
4.2        Vodafone Idea Profile
4.2.1      Vodafone Idea Revenue, EBITDA and Capex Mix, 2014-2020
4.1        Reliance Jio Profile
4.1.1      Jio Corporation Revenue, EBITDA and Capex Mix, 2015-2020
4.2        BSNL Profile
4.2.1      BSNL & MTNL Revenue and Capex, 2014 – 2020
4.3        Other Players Profile
4.3.1      Tata communications
4.3.2      Global International Carriers
4.3.3      Other Telecoms Operators

5       India Mobile Market
5.1        Mobile Subscribers Historical and Forecast, 2014-2026
5.1.1      Mobile Subscribers Historical, 2014-2020
5.1.2      Mobile Subscribers Market Share, 2014-2020
5.1.3      India Smartphone Share, 2021
5.1.4      India Mobile Subscribers Forecast, 2019-2026
5.1.5      India Mobile Subscribers by Generation (2G, 3G, 4G & 5G) Forecast, 2019-2026
5.2        Mobile Revenue Historical and Forecast, 2014-2026
5.2.1      Historical India Mobile Service Revenue, 2014-2020
5.2.2      Mobile Service Revenue Forecast, 2019–2026
5.2.3      Mobile Subscribers ARPU, 2014-2020
5.3        Spectrum Holdings
5.3.1      Spectrum Pricing and Regulation
5.3.2      5G Trials and 5G Auctions Results
5.3.3      Mobile Frequencies Portfolios Analysis
5.3.1      Spectrum Depth Benchmark by Country
5.4        Mobile Download Data and Pricing Trends
5.5        Mobile Speed Tests
5.6        Internet of Things (IoT)

6       India Broadband Market
6.1        Fixed Broadband Subscribers Historical, 2014-2020
6.2        Fixed Broadband Subscribers Forecast, 2019-2026

7       India Telecommunications Infrastructure Investments
7.1        Fixed Digital Infrastructure
7.1.1      Government Plans
7.1.2      Submarine Cables

8       India Telecom Towers Infrastructure Landscape
8.1        India Telecom Towers Market Analysis, 2020
8.1.1      India Telecom Towers Market Overview
8.1.2      India Telecom Towers Background
8.2        India Tower Market Competitive Landscape Comparison
8.3        India Telecom Towers & Rooftops Market Forecast
8.3.1      India Telecom Towers and Rooftops Forecast, 2020-2025
8.3.2      Regulatory Considerations
8.4        Reliance Jio Infratel Profile
8.4.1      Reliance Jio Infratel Towers Key Performance Indicators
8.5        Indus Towers Profile
8.5.1      Indus Towers Revenue, EBITDA and Capex, 2014 – 2020
8.5.2      Indus Towers Key Performance Indicators
8.6        American Tower Profile
8.6.1      American Tower Key Performance Indicators
8.7        GTL Infrastructure Profile
8.7.1      GTL Infrastructure Towers Key Performance Indicators
8.8        Tower Vision Profile
8.8.1      Tower Vision Towers Key Performance Indicators
8.9        Ascend Telecom Profile
8.9.1      Ascend Telecom Towers Key Performance Indicators
8.10      Spectrum Holdings
8.10.1     Spectrum Regulation
8.11      Telco Infrastructure Comparative

9       Thematics / Opportunities
9.1        Consolidation Opportunities
9.2        Diversification Opportunities
9.2.1      e-Commerce
9.2.2      Digital Payments
9.3        New Telecoms Operating Model
9.3.1      The Attraction of Infrastructure Multiples
9.4        5G Developments
9.4.1      5G Overview
9.4.2      5G – Relative Capex Investments and Frequency Range
9.4.3      5G OpenRAN
9.4.4      Beyond 5G and Towards 6G

10     Telco M&A Transaction Database

11     Methodology

11     Copyright Notice

India Telecoms Industry Report – List of Figures

Figure 1 – Telco sector revenue as % of GDP in India
Figure 2 – Gross Revenue Profile Historical Mix(INR m), Boom and Bust, 2014 – 2020
Figure 3 – Telecommunications Market Revenue Pool, 2020
Figure 4 – Telecommunications Market EBITDA Pool, 2020
Figure 5 – Telecommunications Revenue & EBITDA Share Estimates, 2020
Figure 6 – Total Telecoms Market Gross Revenue and Growth Rate (INR bn), 2019-2026
Figure 7 – Capex to Revenue Benchmark, 2014-2020
Figure 8 – Capex to GDP Ratio Benchmark, 2014-2020
Figure 9 – Telecommunications Capital Expenditure Spend, 2000-2026
Figure 10 – Bharti Airtel Service Revenue Mix, 2014-2020
Figure 11 – Bharti Airtel Historical Revenue Mix, 2014 – 2020 (INR m)
Figure 12 – Vodafone Idea Operating Revenue Mix, 2014-2020
Figure 13 – Reliance Jio Historical Revenue, EBITDA and Capex (INR m), 2014 – 2020
Figure 14 – BSNL & MSNL Historical Revenue (INR m), 2014 – 2020
Figure 15 – Tata Communications Revenue and Revenue Growth (INR m), 2014-2020
Figure 16 – Global Carrier Gross Revenue and Growth (INR m), 2014-2020
Figure 17 – ATC Gross Revenue and Growth Rate (INR m), 2014-2020
Figure 18 – Mobile Subscribers Share Comparison, 2014-2021
Figure 19 – Mobile Subscriber Share Comparison, 2014-2021
Figure 20 – Mobile Net Adds (000’s) Comparison, 2015-2021
Figure 21 – Mobile Subscribers Forecast, 2014-2026
Figure 22 – India Mobile Subscribers by Generation (2G, 3G, 4G & 5G) Forecast, 2019-2026
Figure 23 – Mobile Service Revenue Forecast (INR bn), 2019-2026
Figure 24 – Mobile Subscribers ARPU (INR), 2014-2026
Figure 25 – India Telecom Circles Map
Figure 26 – Subscriptions per MHz of Spectrum, Emerging Asia-Pacific Countries, 2021
Figure 27 –Mobile Handsets Monthly Download Data, 2017-2020
Figure 28 – Data Pricing Trends in Asia-Pacific (US$ per GB per month), 2017-2020
Figure 29 – IoT Operators and spectrum available for IoT in India
Figure 30 – Broadband Subscribers Share Comparison, 2014-2021
Figure 31 – India Net-Adds (000’s) by Operators, 2015-2021
Figure 32 – Broadband Subscribers Forecast, 2019-2026
Figure 33 – India Telecom Towers Market Share, 2020
Figure 34 – India Telecom Towers & Rooftops Forecast, 2020-2025
Figure 35 – Telecoms Providers EV/EBITDA Ranges
Figure 36 – 5G Network Slices Structure
Figure 37 – Effect of Frequency on Range
Figure 38 – 5G Capacity and Coverage Layers
Figure 39 – Relative Capex Required for 5G Network Infrastructure Investment
Figure 40 – Telecom Infra Project – OpenRAN Vision

India Telecoms Industry Report – List of Tables

Table 1 – India – Key Statistics
Table 2 – Telecommunications Market Gross Revenue by Operators, 2014-2020
Table 3 – Total Telecommunications Market Revenue, 2019-2026
Table 4 – Historical Telecommunications Capex Spend, 2014-2020
Table 5 – Total Telecommunications Capex Investments Forecast, 2019-2026
Table 6 – Historical Bharti Airtel Revenue, EBITDA and Capex, 2014-2020
Table 7 – Historical Vodafone Idea (Pro Forma) Revenue and EBITDA Mix, 2014-2020
Table 8 – Historical Reliance Jio Corporation Revenue and Profit Mix, 2015-2020
Table 9 – Historical BSNL and MTNL Revenue, EBITDA & Capex, 2014-2020
Table 10 – Historical Tata Communications Revenue, 2014-2020
Table 11 – Historical Global Carrier Gross Revenue, 2014-2020
Table 12 – Historical ACT Revenue, 2014-2020
Table 13 – Historical Mobile Subscribers, 2014-2021
Table 14 – India Mobile Subscribers Forecast, 2019-2026
Table 15 – India Mobile Subscribers by Generation (2G, 3G, 4G & 5G) Forecast, 2019-2026
Table 16 – Historical Mobile Service Revenue, 2014-2020
Table 17 – Mobile Service Revenue Forecast, 2019-2026
Table 18 – Historical Mobile Market Blended Mobile ARPU, 2014-2021
Table 19 – Mobile Spectrum by Operators and by Band (MHz)
Table 20 – Bharti Airtel Mobile Frequencies and by Band (MHz)
Table 21 – Vodafone Idea Mobile Frequencies and by Band (MHz)
Table 22 – Reliance Jio Mobile Frequencies and by Band (MHz)
Table 23 – BSNL/MTNL Frequencies and by Band (MHz)
Table 24 – Historical Broadband Subscribers, 2014-2021
Table 25 – Historical Broadband Monthly ARPU, 2014-2021
Table 26 – India Broadband Subscribers Forecast, 2019-2026
Table 27 – International Submarine Cable Systems with Landing Stations in India
Table 28 – India Telecom Towers Market Analysis, 2020
Table 29 – India Telecom Towers Indicative Tower Leasing Annual Fees
Table 30 – India Tower Market Competitive Landscape Comparison
Table 31 – India Telecom Towers Transaction Database, 2009-2020
Table 32 – India Telecom Towers and Rooftops, Revenue, Mobile Subscribers, Penetration & ARPU Forecast, 2020-2025
Table 33 – Reliance Jio Infratel Key Performance Indicators, 2020
Table 34 – Historical Indus Towers Co Revenue, EBITDA & Capex, 2014-2020
Table 35 – Indus Towers Key Performance Indicators, 2020
Table 36 – American Tower Key Performance Indicators, 2020
Table 37 – GTL Infrastructure Towers Key Performance Indicators, 2020
Table 38 – Tower Vision Towers Key Performance Indicators, 2020
Table 39 – Ascend Telecom Towers Key Performance Indicators, 2020
Table 40 – Bharti Airtel, Vodafone Idea, Reliance Jio, BSNL and Tata Communications Infrastructure Landscape
Table 41 – Technology Specifications (ADSL, FTTN, Fibre, 4G/LTE, 4G/LTE-A and 5G)
Table 42 – Telco Transaction Database, 2009-2021

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