India will focus on expanding 5G use cases and fiber networks to fuel telecom sector growth, says GlobalData, following the news that India has allocated $12 billion for the Department of Telecom in its Union Budget for the Financial Year 2023-24.
Pradeepthi Kantipudi, Telecom Analyst at GlobalData offers her view.
“The Union Budget 2023 places special focus on improving connectivity infrastructure in India to reduce digital divide and encourage the development of new use cases for 5G services with plans to set up 100 labs for developing new use cases such as smart classrooms, precision farming, intelligent transportation systems and health care with 5G as a key enabler.
“The Union Budget earmarks an allocation of $12 billion for the Department of Telecom and about $6 billion capital infusion to the state-run operator BSNL to roll out 4G and 5G services this year. The funding to BSNL will not only enable the operator to launch 4G and 5G services and compete against the likes of Reliance Jio and Bharti Airtel but will also help expand the reach of high-speed wireless broadband to the underserved and rural areas of the country.
“The government has also allotted $263 million on optical fibre cable-based network for defence services and $87 million for telecom projects in the North-eastern states.
“The telecom sector has the potential and the ability to revolutionise the Indian economy and drive it towards becoming a $ 5 trillion-economy by FY 2025-26. Taking its significance into account, the telecom sector saw a 15% increase in budget allocation for the FY2023-24 compared to FY2022-23. Apart from this, the government has also introduced a series of relief measures for the sector, including 100% foreign direct investment through automatic route, moratorium on payment of adjusted gross revenue (AGR) dues, and reduction in bank guarantees, among others.
“The government’s support for the development of new 5G use cases and the expansion of fiber networks will not only foster digital inclusion but also benefit other sectors over the coming years. Improved connectivity with more reliable and higher speed networks will enable technology companies to generate new use cases for industry verticals such as transportation, manufacturing, and agriculture sectors.”