How does Telecom Sector generate revenue?

The Telecom sector in India has shown exponential growth in the last few years fundamentally driven by wider availability and usability. Therefore, Mobile Number Portability(MNP), expansion of 4G, and latest up-coming 5G, evolving subscription, and data consumption have increased.

Introduction

Telecom Sector in India is the second-largest in the world with 1.2 billion patrons. The entire generation is growing primarily in the digital world. More than half of the employees at bigger corporations are working on virtual project groups. However, India has the lowest call-tariffs than any other country in the world authorized by the biggest telecom and strong competition among them.

Facts and figures

• As per the report of GSMA, the telecom industry contributed 6.5% in GDP in 2019.
• After this, wireless subscriber base in the country increased marginally to 1,156 million in January 2020 on the back of additions by Reliance Jio, BSNL, and Bharti Airtel, while Vodafone Idea continued its losing spree.
• 51% growth in E-commerce supports
• Direct employment for 2.2 million people in the country. 
• According to GSMA reports, the telecom sector will contribute the US $ 200 billion to the economy and 3 million.
• App downloads have increased from 12.07 billion in 2017 to 19 billion in 2019 and are expected to reach 37.21 billion by 2022.
• The National Digital Communications Policy of the Government of India foresees investment worth US$ 100 billion in the telecommunications industry by 2022.
• Similarly, India had over 500 million active internet users as of May 2020.
• Also, FDI inflow totaled the US $ 37.27 billion during April 2000-March 2020 in the telecom sector.

Market segmentation of Telecom Sector

1)Mobile (wireless): Companies providing services and maintenance, switching, and transmission facilities to provide communication through frequency.

2)Fixed- Line(wireline): Companies that deliver services and maintenance, supplying direct communications through mainline, microwave, or amalgamation of mainlines and satellite using transmission and switching.

3)Internet Services: includes Internet Service Provider (ISPs) that offer broadband internet connections through consumer and corporate channels. 

Telco 2.0 model (a two-sided working model of telecom)

• Telco 2.0 model delineates the sixth development scope for telecom industries, identifying new categories of operators, benchmark, the primary strategies needed to evolve and survive in the new industry.
• Similarly, it helped to build strategic plans so that they have a conversation with the investors
• In other words, they describe the transformational route to the telecom industry to carve out a valuable. In addition to this, it is playing an important role in evolving the ‘digital economy’.
• Structure for revenue growth and opportunity.
• Broad level support
• Enhancing customer relationships and managing compliance.
• Pricing strategies and building upstream capabilities.

How does the telecom company generate revenue?

Revenue (1): New Wholesale and New Distribution platform

Remix telco assets with apps, contents, and devices enable value-based pricing, increased uses, and a higher margin.

Revenue (2): B2B Value Added Service Platform

• Identifying another party
• Authorization and security
• Promoting offers
• Conducting transactions
• Fulfilling order
• Billing and payments

Also, read:10 ways telecom can make money in the future

Recent trends in the telecom sector?

Cloud-service

Offering Rise of cloud service: Cloud-based offerings from telecom operators ICT providers are growing fast in India. Cloud computing is growing by $266.7 billion in 2020. However, decentralized computing needed malleable, authentic, and firm connectivity. 

•         Impact of Cloud Services
•         Low-power processor and cheaper clouds
•         Faster-interconnects
•         Data Centers become another ecosystem

 Wireless Network Infrastructure

A wireless network work frame is the amalgamation of hardware and software resources of an entire network. Therefore, it enables network connectedness, communication, functioning, and management of an enterprise network. However, it is the conveying route and utility between users, processes, applications, services, and external networks. A dramatic increase in Internet traffic is due to the growing ownership of smartphones. On the other hand, the Wireless Network framework was valued at 12500 Billion US$ in 2019 and is estimated to reach 17700 Billion US$ by 2025, at 5.1% during the prediction period.

Mobile M2M

The M2M industry is estimated to be $4.5T 2020FY. M2M technology is useful in many ways and it is felicitous to the maximum number of industries and technologies. In addition to sending out a distress signal at a moment a car impacting another car or objects with GPS coordinates. Similar possibilities in healthcare and other sectors are equally functional. 

Artificial Intelligence

Artificial Intelligence is a perspective to build a computer, a robot, or a product to think about how smart humans think. The main objective of AI is to enhance computer functions which are associated with human knowledge, for example, reasoning, learning, and problem-solving. However, AI shaped telecommunication intensively and extensively touching various facets of telecom business. The market size of AI was valued at USD 39.9 billion in 2019. Therefore, expected to grow at a rate of 42.9%(CAGR) between 2020 to 2027 in the whole world.

The current market players in Telecom

1.Reliance Jio:

Jio is a mobile network operator in the country and owned by Reliance groups. However, the resources and solution, which was started for all users on September 5, 2016, with a ‘Welcome Offer,’ was originally introduced in beta for only Reliance employees on December 27, 2015.

Market Share: 31.7%

Subscribers: 383.67 million

2.Vodafone-Idea

Vodafone Idea is owned by Aditya Birla Group and Vodafone Group partnership and one of the leading telecom service providers. Serve India with data, voice calling with many other facilities in 2G,3G, and 4G spectrum all over India. Vodafone-Idea listed on National Stock Exchange (NSE) and BSE in India.

Market Share: 27.57%

Subscribers: 329.07 million

3.Bharti Airtel 

Airtel is an Indian global telecommunications services company and working in more than 18 countries. Airtel also upgraded with VoLTE technology across all over India, the second-largest mobile network operator in India as well as in the world.

Market Share: 28.31%

Subscribers: 328.95 million

4.BSNL

BSNL is an Indian state-owned telecommunications company and incorporated by the Government of India on 1 October 2000. Consequently, it provides mobile voice and internet services through its nationwide telecommunication network across India. In addition to this, it is one of the largest telecommunication network companies in India.

Market Share: 10.64%

Subscribers: 123.18 million

Conclusion

In conclusion, highly advanced technology and innovations are existing as per the requirements of consumers in the telecom sector. There are diversified revenue generation medium and strong competition among the telecom companies. Above all,these companies are working on satisfying users and values.