Rural teledensity provides ample growth potential for telecom industry

Chennai: With a subscriber base of 1197 million, India is the second-largest telecom market in the world. However, the telecom density in the rural market at 58.92 per cent retains a large untapped potential against 134.13 per cent in the urban market.

As of February 2024, the number of telecom subscribers - both wireless and wired - in the country stood at 1197 million, and in terms of subscriber base India is second to China with 1781 million. However, India has a large potential to grow its subscriber base as the teledensity in rural areas is relatively low.

India has an overall teledensity of 85.64 per cent and that in the rural market is largely untapped at 58.92 per cent compared to the urban market with 134.13 per cent. The rural market provides a large opportunity for the telecom equipment manufacturing industry, as per a report by Prabhudas Lilladher.

BSNL has issued a tender worth Rs 65,000 crore for the phase-III BharatNet project. This initiative aims to bolster connectivity in rural areas by upgrading existing infrastructure and connecting additional gram panchayats. The tender covers the design, supply, construction, and installation of optical fiber cables, switches, routers, and other essential telecom equipment.

Further, fixed broadband subscriptions in India are at 2.85 per 100 people, almost one-fourth of the global average. This indicates significant headroom for growth. Home broadband penetration in India stands at 13 per cent, with the government aiming for 80 per cent. India has more than 7.5 lakh telecom towers, envisaged to be increased to 15 lakh towers in the coming years.

Production Linked Incentive (PLI) scheme worth Rs 12,195 crore has been initiated for the manufacturing of telecom and networking products. In addition, incentives worth more than Rs 4,000 crore have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.