New Delhi: Amid lay-offs in the IT sector, there is one sector that is going to have remedial solution for job crisis in the market. The telecom sector likely to increase job opportunities by 30 lakhs by 2018, according to an ASSOCHAM-KPMG joint study. Roll out of 4G technology with an increase in data, entry of new players in the market, introduction of digital wallets, popularity of smart phone leading to consistent increase in demand for technology and other developments in the telecom sector.
Emerging technologies such as 5G, M2M and the evolution of Information and Communications Technology (ICT) are expected to create employment avenues for almost 870,000 individuals by 2021, reveals the ASSOCHAM-KPMG joint study.
The existing manpower in the sector may not be adequate both in number as well as in skill to cater to the upcoming demand. There is a need to bridge the gap in skill which on the one hand would require identification of skilled manpower in diverse roles such as infra and cyber security experts, application developers, sales executives, infrastructure technicians, handset technicians etc. as well as on the other hand reskilling of existing manpower working on existing technologies for them to be updated with upcoming requirements.
The telecom sector has grown at 19.6 per cent CAGR in terms of subscriber base and at 7.07 per cent CAGR from a revenue perspective over the last few years.
“TSPs have continued to invest in their networks and modernise their existing network infrastructure. Operators CAPEX investments stands at INR 85003 crore during Q1 2017 and the below figure depicts the significant CAPEX investment during the period 2012- 2016”, noted the study.
Operators made these capex investments primarily to deploy new technologies like 4G and 4G-Advanced, to expand their fibre footprint and to acquire spectrum via spectrum auctions. These investments have resulted in increased borrowings for the TSPs and hence led to an increase in debt burden for the operators, resulting in highly leveraged TSP balance sheets.
Indian telecom sector is a highly price-sensitive market with a subscriber base that has majority prepaid subscribers with lower ARPU. Also, competition in the sector has increased thereby putting a pressure on the operator margins.
The increased debt burden on operators coupled with continuous pressure on profitability has affected the financial health of the telecom sector. Further, initiatives from the government to enhance the health of the telecom sector and enable a cost efficient expansion of digital services are required.
The Indian telecom industry has seen a paradigm shift from a voice centric market to a data-centric market. While voice business still contributes a large chunk towards operator revenues, data revenues have shown an exponential growth trajectory over the last few years. By the end of 2016 the number of internet subscribers in India was 391.50 million making India globally the 2nd highest in terms of internet users.
Mobile data traffic also grew by 76 per cent in India in 2016 primarily attributed to increased smart phone penetration. This growing usage of smart phones, especially in urban areas, has increased the usage of internet on hand-held devices – in 2016, 559 megabytes of mobile data was generated per month by an average smart phone, up from 430 megabytes per month in 2015. Consumption of video content is also forecasted to be 75 per cent of India’s mobile data traffic by 2021, compared to 49 per cent in 2016.
Advancements in innovative IoT technologies, like health monitors, smart transport, smart meters among others, is projected to result in 21 per cent increase in M2M services. These advances will result in a significant growth of mobile data, and as the telecom sector moves to newer technologies, TSPs will need to identify innovative avenues to monetise this data opportunity.
Vision 2020
Total number of SIM connections is expected to reach 1.4 billion by 2020 from the current 1.1 billion
With 646 million unique mobile subscribers, India is the second largest mobile market in the world and will add more than 300 million new unique subscribers by 2020
Telecom sector contribution to GDP will reach 8.2 per cent by 2020
Smart phone subscriptions will reach 674 million by 2020
Wearable device market is expected to grow from 2.5 million units in 2016 to 4.1 million units in 2020
India has shown tremendous growth potential for IOT solutions with the market poised to reach USD 15 billion by 2020 with 2.7 billion units of connected devices from the current USD 5.6 billion with 200 million units of connected devices in 2016
Data growth driving operator revenues from USD 31 billion in 2016 to USD 39.7 billion in 2020 with a capex investment of USD 35 billion during the period 2016-2020.
