India, the world’s second-largest telecommunications market with more than 900 million telephone connections, experienced sluggish expansion in the telecom sector in 2013. However, based on the implementation of new policies and increased industry stability, industry pundits are predicting that 2014 will usher in a boom for the industry.

 

Internationally expanding companies in particular should see new opportunities in India this year. At the tail end of 2013, the Empowered Group of Ministers on telecom approved a mergers and acquisitions that included raising the ceiling on market share for companies in a deal from 35 to 50 percent. The new policy is designed to entice outside interest in India’s telecom market and consolidate some of the country’s 12 current operators.

 

“The mergers and acquisition policy will have a major impact,” said Rishi Tejpal, principal research analyst with Gartner. “Once the market stabilizes, it will play its role. With clarity, we can expect some more foreign players to come in.”

 

In addition to the mergers and acquisitions policy changes, 2014 will mark the first full year that India’s 2012 National Telecom Policy (NTP) is in effect. The law states that users can switch providers without having to change mobile numbers and abolishes roaming charges. Additionally, NTP allows telecom providers to offer users service using any kind of technology platform—a provision aimed at increasing the industry’s footprint in India and democratizing telecommunications, which have expanded much more quickly in cities than rural areas.

 

The policy was also designed to create an attractive atmosphere for outside investment and to encourage the adoption of technology that offers benefits to education, employment, healthcare, and other crucial sectors. Other goals Telecom Minister Kapil Sibal addressed shortly after the law’s passage included:

 

  • Taking Advantage of Cloud Computing
  • Transforming India into a Global Telecom Hub
  • Converging Networks, Services, and Devices
  • Simplifying  Licensing

 

“The NTP 2012 projects a bold vision for [the] telecom sector with emphasis on spectrum management, broadband on demand, domestic manufacturing, rural coverage and infrastructure status, which would spur growth of the telecom sector,” added Deloitte Haskins & Sells Partner Hemant Joshi.

 

India is clearly liberalizing and modernizing its state of telecommunications, meaning international companies should keep a close eye on what develops.

 

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