Revenues from 4G services to reach Rs 79,580 cr by 2020: Report

The advent of 4G will be a game changer and with launch of such services by multiple service providers this year in India, 4G connections are likely to account for 17 per cent of the total user base by 2020 with revenues to the tune of Rs 79,580 crore.

As per a report by industry body Assocham and KPMG, the entire business mix of the telecom industry is going to witness a sea change and the unveiling of 4G on large scale by one of the largest corporate houses, is going to be a major development.

Mukesh Ambani owned Reliance Jio has announced launch of pan-India 4G services from September 5 whereas other operators including Bharti Airtel, Vodafone, Idea Cellular and RCom too have been offering the high-speed services and are expanding also.

The report said it is estimated that the advent of 4G will enable the service providers to unleash a host of data-based services over the next five years.

“By 2020, 4G connections are expected to account for about 17 per cent of India’s total user base. This is expected to significantly transform the revenue mix of service providers with estimated Long Term Evolution (LTE) revenues expected to reach Rs 79,580 crore,” it added.

The Assocham-KPMG report said the demand for high speed internet services would receive a further push from key governmental initiatives such as ‘Digital India and ‘Smart Cities’.

Besides mobile networks have been identified as key tools for financial inclusion where 4G can facilitate implementation of government’s social sector schemes in a faster and secure way.

The report further said handset manufacturers are already catering to the growing audience of current and future 4G users.

The next two years are expected to see a large number of 4G handsets entering the market, across price ranges. Indian handset manufacturers are best suited to leverage on the largely untapped rural 4G market by introducing offerings in lower price ranges.

It said the telecom sector in India is at an inflexion point, where it is poised not only to ride a high growth trajectory but also to provide a strong impetus to the government’s key development initiatives.

However, the report also sounded a word of caution. “While demand growth is expected to remain steady on the back of affordable smart phones, digital inclusion programs and 4G rollouts, high capital requirements and an extremely competitive scenario continue to affect the profitability of key players”.