Four Out of Every 20 Mobile Subscribers in Metro Circles Have a 4G Enabled Smartphone: ASSOCHAM

By July 16th, 2018 AT 5:35 PM

Indian Telecom Service Providers (TSPs) have invested about Rs 9,27,000 crore while Foreign Direct Investment (FDI) in the telecom industry has increased from Rs 20,000 crore in FY15-16 to approximately Rs 67,000 crore in the first three quarters of FY16-17, contributing towards building an efficient infrastructure to provide accessible and affordable service to customers, according to an ASSOCHAM-KPMG joint study. Telecom service providers (TSP) play a vital role in providing major support services required for swift growth and transformation of multiple sectors such as IT, insurance, education, health, public sector, etc., reveals the ASSOCHAM-KPMG joint study.

mobile tower

A fairly conducive regulatory environment has been created for TSPs through the implementation of new policies and regulatory framework by Telecom Regulatory Authority of India (Trai) TSPs gross revenue stood at approximately Rs 188,000 crore with a decline of 2.68% in 2016-17, noted joint study. The overall data traffic in India went up by 28% of the total data traffic pan-India in a year since launch. In India, 4G subscribers have reached the mark of approximately 160 million as of March 31, 2017.

As per the study, India is now one of the biggest smartphone markets in the world in terms of volume with an increase in the usage of data services leading to a rapid increase in smartphone sales. Four out of every 20 mobile subscribers in metro circles have a 4G enabled smart device and 11 have a 3G enabled smart device.

Social media and messaging application drove data consumption with nearly 90% consumers accessing applications on mobile devices. Videos continued to be the main growth engine for data traffic with nearly 65% contribution, revealed the study.

“India’s telecom industry which is a major contributor to the country’s GDP is going through challenging times where maintaining a balance between market dynamics and time to deliver has created a bottleneck for TSP’s. Tariff wars, increasing debt burden, spectrum license fees and new types of internet-based players etc. have fuelled this situation resulting in a phase of financial stress in the industry. The telecom industry at this point of time has a debt burden of close to INR 5 lakh crores in its quest to provide state of the art infrastructure and buy spectrum,” said ASSOCHAM in a press statement.

This debt increase has been primarily driven by high spectrum procurement costs from five successive auctions wherein the highest bid/sale price at one auction acts as a floor price for the succeeding auction. Aggressive participation of service providers in spectrum auctions has significantly increased the debt burden, it further added.

Furthermore, it said that the declining trend in the profitability of the TSPs is likely to continue due to various reasons like entry of greenfield TSPs as against the existing brownfield operators which will have to undertake huge investments for updating their existing infrastructure, participate in spectrum auctions, imposition of multiple taxes and levies such as Spectrum Usage Charges (SUC), Universal Service Obligation Fund (USOF) contribution and license fee.

The government may consider deliberations on the same with TSP’s while formulating policies and regulations to address challenges faced by all contributors/ verticals of the sector in its entirety. Telecommunications, being an underlying service to the majority of industries contributes significantly towards their operating costs. Levy of higher taxes (recent increase by 3 % putting the telecom sector under the 18% tax slab) on telecom industry may lead to an overall increase in the cost of doing business for other sectors and may impact affordability for the end customers. Thus, reduction in service tax may be considered by the government, urges ASSOCHAM.

Spectrum Usage Charges (SUC) is levied from the time when the spectrum was bundled with the license itself. With the introduction of spectrum auctioning, the license and spectrum are now separately granted with the licensee having to bid for the available spectrum at market-determined prices. For the spectrum allotted, the TSPs have to pay the price of the spectrum as decided in the auction and annual SUC (a proportion of their Adjusted Gross Revenue – AGR) to the government.

Since the purchase price of the spectrum is now market determined and considerably higher than before, SUC adds on to the financial burden of TSPs. Further, since SUC is a fixed proportion of the AGR, the better a TSP performs in terms of revenue, the more they are charged as SUC.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Kaushik IMARamNikhil Mumbai-PuneSudhakarKhanna Bharat Recent comment authors
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Sudhakar
Sudhakar

And the 3 out of the four use the cheap quality chinese 4G smartphones because only price is important to them.

Kaushik IMA
Kaushik IMA

Sudhakar – let me be frank with you. I am now using Vivo X21. What I found: – Display by Samsung – Camera sensors by Samsung – Internally same hardware as any Samsung phone – AKM DAC for audio, which is only found on Samsung S series or C series – Better CPU, more RAM, 128GB internal memory – Under Display Fingerprint sensor is an innovation that should have come to Samsung first! After using it this long I do not understand why anyone would use the so-called “brands”. Samsung still makes sense due to being able to use in… Read more »

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

Sold C9 Pro/F7?

Kaushik IMA
Kaushik IMA

Sold C9 pro. Still have F7.

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

How much you got for C9 Pro?

Kaushik IMA
Kaushik IMA

Nikhil: Around 18.5K.

Sudhakar
Sudhakar

Kaushik : Then why does not the chinese companies fix sAMOLED display and incorporate OIS for all the rear cameras at least in their hogh end models of the phone?. I never talked low about HTC. I am criticizing.Sony and LG of ignoring the sAMOLED display and OIS. No Sony phone has OIS and most of the high end phones in the chinese brands also do not have OIS at least for rear camera(s). Your point is wrong. Samsung itself does not mean to use in extreme weather conditions. For such uses there are RUGGED phones. Durability of the branded… Read more »

Kaushik IMA
Kaushik IMA

Sudhakar: The Chinese companies are not launching all their models in India. Vivo NEX: AMOLED display from Samsung Vivo X21: AMOLED Display from Samsung About LG: I like my LGs, most durable phones after the old Nokias. I have a G4 and Stylus 2 Plus. I can throw them around carelessly and the screen will not get destroyed. But with bad specs they will not survive long….HTC too has this same quality. Samsung: It is true. Samsung phones will retain optimum performance upto 60-65 C, compared to any other brand in India. This is because Samsung tests their phones in… Read more »

Sudhakar
Sudhakar

Show me the proof that I support only high end phones in Samsung and prove that I am the responsible for the farmers being poor. Or else oedidu.

Ram
Ram

I’m rich enough to buy any phone, but I will not buy Samsung!!!!

Sandy
Sandy

Simply say 1 out of 5.

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