India’s Telecom Sector in 2023: Unprecedented Growth and Challenges

The Indian telecom sector has undergone remarkable transformations in 2023, according to SP Kochhar, Director General of COAI.
5G smartphone user in ArgentinaThe nationwide rollout of 5G has been the driving force behind this monumental growth. Reliance Jio and Bharti Airtel have made investment in 5G network across key towns in India.

With an impressive count of over 3.97 lakh 5G BTS sites established across more than 738 districts by November, India has cemented its position as a frontrunner in global 5G adoption. The industry boasts a staggering 1.148 billion wireless subscribers as of August, experiencing a 1.9 percent growth from the previous year. Additionally, the average data usage per subscriber has soared to 17.4 GB per month, COAI said.

However, amidst this growth, a significant challenge looms large for the sector — the issue of Large Traffic Generating (LTG) digital platforms failing to contribute to network costs. Telecom Service Providers (TSPs) have been advocating for a fairer cost-sharing model, emphasizing the need for equitable distribution amid escalating infrastructure expenses.

The absence of financial contributions from LTGs, despite their earnings from subscriptions and advertising, burdens TSPs, hindering their financial sustainability and impeding further investments in network enhancements. This challenge resonates with a recent bill introduced in the US Senate, recognizing the necessity for high-traffic generating platforms to share broadband costs, aligning with India’s telecom sector stance.

The allocation of the 6 GHz spectrum band emerges as a crucial step in advancing 5G capabilities in India. Designating the entire 6 GHz band to 5G communications addresses the surging demand for data services, positioning 5G as a pivotal technology for applications like drones, telemedicine, and smart cities. This decision, validated by the historic agreement at the World Radiocommunication Conference 2023, acknowledges India’s push to harness this spectrum for 5G, 5G Advanced, and future 6G developments.

Yet, unresolved issues persist, including the second phase of 5G spectrum allocation, Right of Way permissions, high levies, and taxes, posing challenges to the telecom sector’s growth. TSPs advocate for a more supportive regulatory environment and seek resolution on these matters. The high cost of commercial electricity tariffs also impacts investment and growth, urging government intervention.

Key achievements in 2023 include India’s rapid completion of 5G rollout obligations across 22 Licensed Service Areas within 10 months, securing its position as the world’s second-largest 5G network. Furthermore, the unveiling of India’s 6G Vision document by Prime Minister Shri Narendra Modi outlines ambitious goals, aiming for targeted 6G deployment by 2030. Collaborative efforts between industry leaders like Nokia and Ericsson in establishing 6G labs signify a collective drive towards shaping India’s telecom future and contributing to global 6G research.

The introduction of the Telecommunications Bill 2023 marks a significant milestone, enabling provisions in Right of Way for robust telecom infrastructure, clarifying penalties, simplifying regulatory frameworks, and ensuring national security in digital communications.

Notable developments in enhancing telecom infrastructure in Northeastern States, progressive Right of Way rules by the Ministry of Defence, and regulatory recommendations by TRAI underline a concerted effort toward sustainable growth.

As India solidifies its 5G leadership, the industry anticipates a dynamic evolution of use cases and calls for collaborative efforts with LTGs. The evolving regulatory landscape is expected to play a crucial role in addressing challenges and fostering an environment conducive to innovation and fair competition.