Foreign direct investment in the telecom sector is expected to touch the highest level of $40 Billion in the current fiscal year on account of high growth in mobile and broadband.
According to the Telecom Equipment and Services Export Promotion Council, the Indian telecom sector is expected to see the highest investment at $40 Billion in the current fiscal (2010-11), as reported by Hindustan Times
The investment growth is recorded at 100% as compared to the figures for the last fiscal wherein the investment stood at $20 Billion.
The prospective increase in foreign investment is based on the fact that different segments of the Indian telecom industry (mobile and broadband) hold huge potential for future growth that attracts investors. According to a market research report “Indian Telecom Analysis (2008-2012)
” by RNCOS
, mobile telephony fuels growth in the telecom sector as mobile subscribers projected to rise at a CAGR of nearly 11% from 2009-10 to 2013-14.
Other segments of the Indian telecom industry such as broadband and Internet are anticipated to record strong growth in terms of network infrastructure deployment and subscribers addition during the forecast period, the report said.
Besides, the operators are poised to expand their network in order to collectively achieve the prospective target of more than one billion mobile subscribers over the next couple of years. The total number of mobile subscribers in India till May 31 2010 touched the level of 617.5 Million, according to the Telecom Regulatory Authority of India. 3G technology is expected to give impetus to the telecom sector that correspondingly attracts foreign investors.
With the increasing foreign direct investment in the Indian telecommunication market, the telecom companies will be able to reshuffle foreign stakes in their companies.
As per a Telecom Analyst at RNCOS
, “The FDI inflow in the Indian telecommunication industry is very critical that led to such a hike in the telecom market till now. The inflow of FDI will definitely support the industry growth. Nevertheless, the upsurge in investment is expected to be confined to the current fiscal only because the industry will achieve most of its developments and expansion in this time period.”
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