Updated on May 06, 2025 02:36:56 PM
The rapid advancement of communication services has grown massively in the last few decades due to the continuous development in the telecommunications network. From providing and exchanging information to transmit communication, the telecom industry is the sunrise industry that reciprocates to network communication through various modes like broadband networking, mobile phones, IoT (Internet of Things), optical fibers, Over the top content (OTT),etc.
Telecom industry is all pervasive in every segment present in the society, including different stakeholders, corporate sectors, Information Technological Industry. In the corporate sectors, big business clients are more concerned with the quality and dependability of their phone conversations and data transmission than they are with price.
Large corporations invest a lot of money in premium services like videoconferencing and high-security private networks as well as telecom infrastructure. By wholesaling circuits to major network users like internet service providers and large organizations, network access may also be given to other telecom companies.
The Indian telecom industry is divided into 8 sub sectors which consists of Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, Telephone service providers and Broadband.
In India, the telecom business is the world's second biggest, with 1.079 billion users as of December 2023 (wireless and wireline). India's total tele-density is 85.23%; of this, the mostly unexplored rural market has a tele-density of 58.56%, while the urban market has a tele-density of 133.76%.
With a 6% share of all FDI inflows, the telecom industry ranks fourth in terms of FDI inflows and directly and indirectly supports 2.2 million jobs. FDI inflows into the telecom sector increased by 150% between 2002 and 2014, from $8.32 billion to $20.72 billion.
In order to actualize a new variety of options, business models, and employment potential, the Government of India wants to establish one hundred laboratories in engineering universities for the development of applications employing 5G services under the Union Budget 2023.
To participate in FDI in the telecom industry, applicants are required to register under the Foreign Investment Facilitation Portal (FIFP). The procedure can be puzzling for any newcomer applicant since it incorporates several terms and conditions without rendering direct access to portals that can generate approvals for FDI.
Table of Content
Following are the objectives of FDI in telecom industry:
100% FDI is allowed in the telecom industry through automatic route.
Many documents are required for FDI in the renewable sector which are as follows:
Following are the procedures which required at the time of FDI in the telecom sector:
Applicants must fill out the online application form along with the relevant documents for making out the proposal for Foreign Direct Investment
Filing the proposal for FDI online within two working days, DIPP then will address the concerned administrative ministry to transfer the proposal of applicants electronically
Collect all the requisite documents for continuing the process of the investment proposal. In case documents may be found incorrect, applicants will be held responsible in case of any deviation found.
The DIPP along with potential authorities will process the application internally and recognize various ministries for adding several comments such as the Ministry of Home Affairs, Reserve Bank of India, Ministry of External Affairs, Ministry Of Finances, etc.
There are conditions tapping for the procedure of FDI approval which must be understood by investors.
The key advantages for investors in India under Telecom industry are as follows:
Following are the benefits derived from the FDI in telecom industry:
In the telecom sector, FDI serves as a growth-promoting agent. It provides much-needed funding for infrastructure expansion, which enables the implementation of cutting-edge technologies like 5G and wider network coverage and quicker internet speeds. This lowers consumer pricing and increases accessibility to telecom services, especially when combined with growing competition from overseas firms. Additionally, international businesses contribute invaluable experience and information that stimulates innovation in the home telecom markets. Nonetheless, governments are essential to establishing a healthy ecosystem.
Several other factors to consider for investors while telecom industry are listed below:
Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions
The revised upper limit for FDI in telecom service companies is structured on the basis of limits. Only 49% FDI is allowed in the telecom sector under automatic route and beyond the 49% limit government route is applied further.
The Telecom Regulatory Authority of India (TRAI) is given essentially judicial powers by the TRAI Act, 1997 to settle telecom disputes. This statute was modified by the TRAI (Amendment) Act, 2000, which made it clearer what TRAI's regulatory and advising functions were.
With a 6.5% GDP contribution, the telecom sector is one of the most significant in the Indian economy. The industry's gross revenue for the final quarter of FY 2022–2023 was INR 85,356 Cr.
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