Telecom industry size set to cross Rs 10 lakh crore: report

The size of the telecom industry is set to cross the Rs 10 lakh crore mark next year and by 2025 it is expected to cross Rs 13 lakh crore as 5G services go live by end of the year. The technology is likely to expand to several cities and towns in 2023 and beyond, as per a report by tech consultancy Techarc.

The report titled, “India Smartphone – Big Picture 2025” outlines the outlook, key trends, and challenges that are expected to be faced by the smartphone industry in India and are based on the analyses done by Techarc along with interactions with the ecosystem leadership representing the smartphone OEMs, channel partners, component suppliers and other key enablers of the smartphone industry in India.

“Smartphones will continue to be the jewel of the telecom industry in India even as 5G goes commercially live in India anytime now. While 5G is poised to improve the overall health of the telecommunications sector, the significance of the smartphones industry is only going to embolden in the 5G era,” Faisal Kawoosa, chief analyst at Techarc said.

The report anticipates that the telecom industry is expected to add Rs 1 lakh crore every three years compared to the previous trend of adding the same in a four-year period. Further, the sector is expected to grow at a compound annual growth rate (CAGR) of 9.4% between 2020-2025, while the smartphone industry will lead the growth at a CAGR of 15.9% during the period.

With the introduction of 5G, Techarc said there is a positive impact on the revenues of the industry with a CAGR between 2023-2025 expected to be 10.1% against 8.2% for the telecom industry between 2020-2022.

“The increase in CAGR by 1.9% due to 5G is likely to give accelerated relief to the telecom sector in the country, after a decade of turbulence which saw consolidation and winding up of several telecom operators from the map,” the report said.

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The report also spoke of the need to create a ‘trinity’ between the Indian technology companies of whatever scale and skill, existing R&D centres in the public sector, and the premier technology institutions like IITs with the sole agenda of India becoming a technology provider globally in the techade.

“Smartphone growth will continue to be backed by upgrade and replacement trends with an estimated 85% of the sales during the period of 2023-25 occurring due to it. In 2024, the 5G smartphone sales will exceed that of 4G smartphone sales with the contribution of 5G smartphone sales touching 54.5%. The 4G smartphones will continue being in demand till a little over 2030,” findings of the report suggested.

Techarc estimates that in 2024, the new smartphone sales will cross the 200 million milestones for annual sales. This means it will double in around 8 years. India started selling more than 100 million smartphones annually in early 2016. It took a little over 11 years to reach the landmark of selling 100 million smartphones annually in India. By 2025, Techarc estimates that smartphone sales will exceed Rs 5 Lakh crores.

“The true 5G years are yet to come in India that will be marked with the introduction of mass volumes in Rs 10,000-20,000. Though it’s important that for extremely price-conscious segments, there are options in 5G available in sub Rs 10,000 also, looking at the previous trends and consumer behaviour, the mass opportunity is likely to fall in the Rs 10,000-20,000 range,” the report predicted.

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