5G subscriptions base of India crosses 130 Mn 2023
Prabhudas Lilladher (PL), one of the most trusted financial services organisations in India, has highlighted PLI schemes as being a key catalyst in the rapid growth of India’s telecom equipment manufacturing sector in its latest Telecom Sectoral Report
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Mumbai, May 23: Prabhudas Lilladher (PL), one of the most trusted financial services organisations in India, has highlighted PLI schemes as being a key catalyst in the rapid growth of India’s telecom equipment manufacturing sector in its latest Telecom Sectoral Report. The report provides a robust analysis of the role equipment manufacturing plays in driving the growth of telecom sector in the years to come. The report states that the sector has seen tremendous development thanks to incentives offered to domestic and international companies through the Product Linked Incentive (PLI) Schemes initiated by the government. According to further analysis, investors can expect a meaningful hike of around 25 per cent by telecom operators post general elections.
The report finds that the ARPU of Rs 208 is set to go up to Rs 286 by the end of FY27 thanks to sustained growth in data consumption, tariffs, and premiumization of existing data users to high-value packs. The report pins these factors as the primary fuel leading to a stronger ARPU CAGR of 7.0% - 7.5% between 2023 and 2027.
Telecom industry of India is the second largest in the world with a subscriber base of 1.084 Bn as of Feb 2024 (wireless + wireline subscribers)., the report also details several factors that can be attributed to the resounding growth trajectory that the telecom sector is currently going through, making it a strong theme in Prabhudas Lilladher.
The findings also reveal that India has an overall tele-density of 85.64%, of which, the tele-density of the rural market, which is largely untapped, stands at 58.92% (44% in 2014) while the tele-density of the urban market is 134.13 %. In addition, the following data regarding developments in the nation’s telecom sector paints a highly optimistic picture for the entire telecom eco-system.
According to Prabhudas Lilladher, schemes under Atmanirbhar Bharat Abhiyan Production Linked Incentive (PLI) Scheme worth INR 12,195 Cr have been initiated for manufacturing of telecom and networking products. In addition, incentives worth more than INR 4,000 Cr have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.
The report goes on to provide some valuable findings on the industry, adding to the widespread confidence investors have in the equipment manufacturing aspect of the sector, which is pegged to be a key avenue to watch out for investors to capitalize on the sector’s boom.
As a result of this holistic development of the telecom ecosystem, telecom equipment manufactured in India has reached world class quality and is currently being exported to North America and Europe. It is also worth noting that as of today, BSNL is the sole project management agency for the Bharat Net project, an initiative that seeks to upgrade existing 1,64,000 gram panchayats and connect approximately 47,000 new gram panchayats under a new model; yet another reason to anticipate strong growth in the telecom equipment manufacturing segment.
