'Gross Revenue of Indian Telecom Operators to Reach $46-49 Billion by 2020'

With increasing contribution from data, the overall revenue of Indian telecom operators is expected to reach $46-49 billion by 2020, Swedish equipment maker Ericsson said on Thursday.

"The industry's overall gross revenues are expected to increase from $28 billion in 2013 to $46-49 billion in 2020," Ericsson said in its white paper, 'India 2020: Bringing the Networked Society to Life'.

The company said the revenue mix of Indian operators is expected to evolve to include a higher contribution from data-driven 3G and 4G services.

"Data revenues will represent an increasing proportion of the total, and are expected to rise from 10-12 percent in 2013 to 35-40 percent by 2020, driven by a growth in data subscribers as well as usage per subscriber," it said.

Other revenue from SMS, traditional value added services and new services is expected to remain stable at $2 billion over 2013-2020, it added.

"Smartphone prices are expected to fall by 40-50 percent over the next three years. As a result, the number of subscribers able to afford smartphones and services are expected to reach over 700 million by 2020, up from 110 million in 2013," Ericsson said.

The number of mobile broadband subscribers is expected to grow from 70 million in 2013 to 600 million subscribers in 2020 with 20 percent of the mobile broadband subscriptions expected to be 4G in 2020.

The white paper stated that to fulfil the government's vision for broadband-inspired growth, operators will need access to more spectrum from the government and will themselves need to build new network capabilities and new revenue models so that a viable, long-term strategy can be evolved.

"Heterogeneous networks with a mix of macro cell sites, small cells and Wi-Fi hotspots will be fundamental to manage coverage, capacity and quality of performance for users," the firm said.

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Ericsson said the increasing number of subscribers, the growing affordability of smartphones and the government initiatives such as the National Optical Fibre Network (NOFN) will drive Internet connectivity in India.

"Broadband has the potential to help bring about inclusive growth in India by extending education, healthcare and financial inclusion to rural areas and lower income groups," Ericsson India Head Chris Houghton said.

In order to achieve and deliver Digital India vision, government and industry need to actively partner to tackle the constraints of limited spectrum availability and device affordability, Houghton added.

Ericsson India Vice President and Head of Strategy and Marketing Ajay Gupta said: "Mobile broadband will be the platform on which Digital India vision can be delivered. For this we will need the release of additional spectrum in the relevant bands. This will contribute to affordability of services and harmonisation of spectrum will allow a lower-cost device ecosystem to evolve."

The paper proposes that the government's broadband penetration target of 600 million connections by 2020 can be achieved if sufficient spectrum is made available in a timely way in globally harmonised bands.

"Additionally, industry and government must work together to ensure contiguity of spectrum to deliver higher bandwidth per user," it said.

Ericsson added that the availability of sub-$50 handsets, accelerated and streamlined spectrum allocation process, differentiated 3G and 4G networks based on high speeds, attractive data packages and good user experience will be critical to driving demand in India.