India Telecom Equipment Market Outlook to 2028

India Telecom Equipment Market Overview

The India Telecom Equipment Market is valued at USD 19.1 billion, driven by rapid growth in digital infrastructure and increasing data consumption fueled by the rollout of 4G and 5G networks. The markets expansion is attributed to investments in fiber-optic infrastructure and government incentives under the Digital India initiative, which are enhancing connectivity across urban and rural regions.

Key cities such as New Delhi, Bengaluru, and Mumbai lead the market due to their established infrastructure and tech-savvy populations. These regions dominate because of high telecom density, robust network infrastructure, and being the primary hubs for large telecom companies, ensuring quicker deployment and adoption of new technologies.

The PLI scheme, allocated INR 4,000 crore to telecom manufacturing in 2024, aims to boost domestic production of advanced telecom equipment, targeting 15-20 local manufacturers by year-end. This initiative is expected to generate an additional INR 1,500 crore in local telecom equipment sales, reducing reliance on imports and fostering self-sufficiency within the sector.

India Telecom Equipment Market Segmentation

By Equipment Type: The market is segmented by equipment type into Core Network Equipment, Transmission Equipment, Access Network Equipment, Customer Premises Equipment (CPE), and Infrastructure Equipment. Recently, Core Network Equipment has dominated this segment due to increased demand for network upgrades in urban and semi-urban areas. The primary driver behind this dominance is the high requirement for advanced network hardware to support growing 4G and 5G data traffic, ensuring optimal speed and quality for users.

By Technology: The market is also segmented by technology into 4G LTE, 5G NR, Fiber Optics, Satellite Communications, and Io T-based Networks. 5G NR currently leads in market share due to telecom providers heavy investments in deploying 5G infrastructure nationwide. The demand for 5G is fueled by the increased reliance on high-speed mobile internet for applications like video streaming, remote work, and Io T solutions, which have accelerated since the recent surge in digital connectivity.

India Telecom Equipment Market Competitive Landscape

The market is dominated by several leading players, including both domestic and international firms, which have consolidated their presence through strategic partnerships and product innovations. This competitive concentration allows for technological influence from these players, who set trends and standards within the industry.

India Telecom Equipment Market Analysis

Market Growth Drivers

Increased Demand for 5G Infrastructure: With India targeting the deployment of 5G services across urban and rural areas by 2024, the demand for 5G telecom equipment has surged. The governments allocation of INR 9,000 crore in the Union Budget 2024 to support rural connectivity is expected to drive the procurement of advanced equipment from telecom providers, estimated at over 7 million new equipment units by 2024 alone.

Substantial Investment in Fiber Optic Infrastructure: Indias National Broadband Mission aims to establish over 500,000 kilometers of fiber optic cable by the end of 2024, fueling growth in the telecom equipment market, especially in fiber-related infrastructure such as OLTs (Optical Line Terminals) and ONTs (Optical Network Terminals). By the beginning of 2024, the government had installed nearly 350,000 kilometers, requiring over 1.5 million fiber-related equipment units to bridge the remaining demand.

Rise in Mobile Data Consumption and Telecom Upgrades: Mobile data usage in India is expected to reach over 20 billion gigabytes monthly in 2024, which demands consistent upgrades in telecom equipment. This increased data consumption drives telecom companies to replace outdated equipment with enhanced routers, antennas, and servers. By 2024, these upgrades are anticipated to create an annual demand for around 4 million network devices across all major telecom providers in the country.

Market Challenges

High Capital Requirement and Cost of Upgrades: The telecom industry in India requires around INR 8,000 crore annually for equipment upgrades to meet modern data and connectivity demands, which challenges smaller telecom players unable to meet these capital-intensive requirements. This high expenditure on essential network infrastructure and 5G compatibility often deters new entrants and hampers the growth rate of local telecom providers.

Dependency on Imports for Advanced Components: Despite growth in local manufacturing, over 65% of India's advanced telecom components are imported, with countries like China and Taiwan leading the supply. The fluctuating INR exchange rate in 2024 has increased the cost of these imports, with telecom providers experiencing a rise in procurement costs by nearly INR 600 crore annually, affecting profit margins and slowing down the rate of equipment upgrade cycles.

India Telecom Equipment Market Future Outlook

The India Telecom Equipment industry is projected to witness substantial growth, driven by continued investment in 5G infrastructure, fiber-optic networks, and the demand for high-speed internet connectivity.

Future Market Opportunities

Increased Deployment of 5G Infrastructure across Tier 2 and 3 Cities: By 2028, telecom companies in India are projected to install over 20,000 5G base stations across Tier 2 and Tier 3 cities, enhancing connectivity and enabling digital services in these regions. This expansion, supported by government incentives, will likely serve around 50 million additional users in the coming years.

Shift Towards Open Radio Access Networks (Open RAN): India is expected to lead in adopting Open RAN by deploying around 10,000 Open RAN-enabled telecom towers by 2027, reducing dependency on traditional hardware providers and fostering a competitive equipment market. Open RAN will support advanced network flexibility and cost-effective expansions across urban and rural areas.
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