India is poised to experience an economic transformation driven by the synergistic power of 5G, satellite communication (satcoms), and semiconductors. A recent report by KPMG outlines the monumental impact of these technologies on the nation’s economy and job market. Over the next five years, 5G, satcoms, and semiconductors are projected to contribute approximately $240 billion to India’s economy and an estimated 1.6 percent to the national GDP by FY28. This report delves into the transformative potential of these technologies and their role in positioning India as a global digital powerhouse.
The Telecommunications Sector’s Growth:
India’s telecommunications sector is currently valued at a staggering Rs 3,000 billion and is set to experience significant growth, with a compound annual growth rate (CAGR) of nearly 7-9 percent by FY24. Notably, this growth translates into a substantial increase in job opportunities within the sector. With the imminent rollout of 5G/6G, the telecom industry is expected to see a nearly 40 percent increase in hiring. This influx of new positions is poised to have a positive impact on the job market.
The Employment Landscape:
Presently, the telecommunications sector employs around 4 million people, with 2.2 million in direct employment and 1.8 million in indirect employment. By FY26, it is projected that the sector will exceed 6 million jobs. The proliferation of cutting-edge technologies such as the Internet of Things, 5G/6G, and virtual network operations will be key drivers of this job market expansion.
Data Consumption and Future Trends:
India stands out globally with one of the highest numbers of data users per capita. Indian internet users consume an average of 19.5 GB of data each month, with 4G accounting for a significant 99 percent of total data traffic. The report anticipates that by 2028, Indians will consume a substantial 62 GB of data per month, reflecting the evolving digital landscape.
The growth of Over-The-Top (OTT) content viewership, reduced data costs, and the rise of remote work and online education have been pivotal factors contributing to this surge in data traffic. The report also highlights the remarkable doubling of rural smartphone ownership between the pre-Covid era and 2023, with projections indicating a 56 percent rural internet penetration rate in India by 2025.
Spectrum Allocation Strategy:
The report provides insights into spectrum allocation strategies. It cites examples of countries like Germany, where certain frequencies are designated as ‘general assignments’ for public or specific group use. The report notes that, for 5G deployment, Germany has chosen to allocate spectrum to telecom providers on a rolling basis, prioritizing rapid service deployment over short-term revenue maximization.
India is on the cusp of a digital revolution powered by 5G, satcoms, and semiconductors. These technologies are set to play a pivotal role in propelling the nation’s economy, contributing $240 billion and increasing GDP. Moreover, the telecom sector’s growth and its positive influence on job creation will further strengthen India’s position as a global digital force.
