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Introduction
India possesses the world's second-largest telecommunications network which is marked by consistent growth in its subscriber base both in the wireless and wired broadband subscriptions. This growth can be attributed to a combination of factors that involve the progressive policies of the Indian government that are driven by a commitment to liberalization, reform and the strong demand from consumers by the facilitative regulatory environment. The government's policies have facilitated easy access to telecom equipment and established a regulatory framework that ensures telecom services remain affordable and accessible to consumers.
Furthermore, the liberalization of Foreign Direct Investment (FDI) standards has impelled rapid growth in the sector making it one of the fastest-growing industries and a major contributor to employment in India. The success of India's telecom sector is largely due to the significant expansion of wireless services that are supported by a modern and robust telecom infrastructure. This infrastructure has played a crucial role in bridging the digital divide by connecting previously unconnected areas and enabling widespread mobile connectivity.
The telecom infrastructure industry in India has laid a solid foundation for the sector's growth and has facilitated its adaptation to rapid technological advancements. This has ensured that the Indian telecom sector remains competitive and continues to meet the evolving needs of consumers in the digital age.
Telecom connectivity breaking barriers in the villages of Kaurik and Guea
Telecom connectivity has finally reached the remote villages of Kaurik and Guea settled in the breathtaking landscapes of the Lahaul and Spiti districts of Himachal Pradesh, India. Located at a breathtaking altitude of 14,931 feet above sea level these villages have taken a giant leap into the digital age by marking a significant milestone as India's first village to be connected digitally.
Kaurik: A Border Village
Kaurik, situated in the Lahaul and Spiti districts of Himachal Pradesh finds its place within the beautiful valley of the Parang or Pare Chu River, just before it meets the Spiti River. Known for its closeness to the Tibet border, Kaurik has remained isolated due to its remote location making connectivity a long-awaited necessity for its residents.
Guea: Amidst the Tranquility of Spiti Valley
Guea, located approximately 40 kilometres from the renowned Tabo Monastery is settled in the Tabo village of the enchanting Spiti Valley in Himachal Pradesh. Positioned at a latitude of 31.11 and a longitude of 77.16, this village is a peaceful retreat with its attractive surroundings drawing visitors from far and wide. Despite its nearness to the India-China border, Guea has been cut off from the digital network until now.
Unlocking communication channels
For years, Kaurik and Guea have remained isolated, their scenic beauty overshadowed by the challenge of connectivity. However, with the recent introduction of telecom connectivity , residents of these villages can now access communication channels which leads to opening doors to information, connectivity and opportunities previously beyond their reach.
Expanding connectivity in Uttarakhand
The journey towards remote connectivity in India doesn't end with Kaurik and Guea. In February 2024, Bharat Sanchar Nigam Limited (BSNL), the state-owned telecom operator announced a similar endeavour in Uttarakhand. Mobile towers were set up to bridge the communication gap for residents of Nelong and Jadung villages, located at an altitude of 11,400 feet above sea level. These villages once bustling trading centres between Tibet and India are now embracing the benefits of modern connectivity, thanks to this remote connectivity initiative. Additionally, efforts are ongoing to ensure mobile signal reception along the Janaktal track further enhancing connectivity in the region.
Global GDP growth outlook amidst economic factors
The International Monetary Fund (IMF) anticipates a moderation in global gross domestic product (GDP) growth forecasting a 3.0% growth rate for 2023 down from 3.5% in 2022 with a further decline to 2.9% in 2024. This slowdown is attributed to various factors that has even affected the telecom sector and a domino effect is seen, such as :
- Long-Term Fallout of the Covid-19 Pandemic: The persistent effects of the Covid-19 pandemic continue to impede economic recovery, contributing to slow and uneven growth worldwide.
- Geopolitical Tensions: Ongoing conflicts such as the Russia-Ukraine conflict and tensions in the Middle East (including the Israel-Hamas conflict and actions against the Houthis in Yemen by the US and UK) add to the economic uncertainty and volatility.
- Geoeconomic Fragmentation: Increasing fragmentation in global economic relations adds to the challenges faced by countries, affecting trade, investment, and overall economic stability.
- Monetary Policy Tightening: Central banks are tightening monetary policy to combat inflationary pressures, which can dampen economic growth by increasing borrowing costs and reducing consumer spending.
- Withdrawal of Fiscal Support: Many countries are scaling back fiscal stimulus measures introduced during the pandemic which could hinder growth especially in economies with high debt levels.
- Extreme Weather Events: The rise in the frequency and intensity of extreme weather events poses risks to economic activities by disrupting supply chains, damaging infrastructure, and affecting agricultural output.
The divergence in growth trends across regions is notable with advanced economies and some emerging and developing economies failing to reach their pre-pandemic growth trajectories. However, countries such as India, Indonesia and Vietnam are seen as having significant growth potential despite the global economic challenges.
What does the Indian telecom sector hold for the future?
The telecommunications sector in India is controlled for continued growth due to various factors such as government initiatives aimed at boosting domestic telecom manufacturing, a supportive regulatory framework, and the imminent rollout of 5G technology. This sector has experienced significant expansion in recent years and it is projected to continue growing at a rate of $12.5 billion every three years with the introduction of 5G. 5G technology promises to revolutionize connectivity with its ultra-low inactivity and high data rates by opening up new possibilities for collaboration and innovation globally. In addition, it will prompt India to rethink its approach to the digital world, accompanying a faster and digital era.
One notable initiative by the government is the project to extend 4G mobile services to isolated villages aligning with the goal of providing mobile connectivity to rural areas. This project is expected to facilitate the delivery of various essential services such as e-governance, banking, telemedicine, and education through mobile broadband. Moreover, it will contribute to employment generation in rural areas thereby nurturing economic development and inclusivity.
Conclusion
Over the past decade, the telecommunications industry in India has experienced significant growth. The rate of teledensity which measures the number of telephone connections for every hundred individuals has increased substantially driven primarily by the surge in wireless subscriptions. While broadband internet subscriptions are also on the rise then their growth rate is somewhat slower compared to wireless subscriptions.
The widespread use of mobile phones has already begun to have a noticeable impact on the country's economy. Furthermore, with the introduction and diffusion of 3G technology, there are expectations for further expansion, particularly in rural wireless markets.
The Telecom Regulatory Authority of India (TRAI) has put forth recommendations to the government aimed at fostering various aspects of the telecommunications sector. These recommendations include initiatives to promote rural telephony, encourage domestic telecom equipment manufacturing, promote environmentally friendly practices in the industry (referred to as green telecommunications) and stimulate the adoption of internet and broadband services. These efforts are intended to address the diverse challenges confronting the sector.
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