Technology, media and telecommunications set for major growth in India

22 January 2018 Authored by Consultancy.in

In congruence with the general consensus on a digital boom in India, Deloitte’s annual Technology, Media and Telecommunications (TMT) predictions for 2018 project towering revenues for the digital arena and its components. The lucrative sports broadcasting industry will continue to make a significant contribution.

Innovation in the digital sphere is simultaneously disrupting and providing impetus to a number of industries. The effects are being felt across every industry, although some will undergo a slightly more radical transformation than others. The financial sector, for instance, is taking on an entirely new character in light of FinTech technologies, which are changing the very nature of the financial transaction.

However, of the industries impacted by digital advancement, perhaps none are as directly affected as media and telecommunications, which have come to rely almost solely on digital platforms in recent years, most significantly since the advent of the smartphone.

In India, the 1 billion+ population (the majority of which was hitherto disconnected from the online sphere) represented a monumental untapped market for digitally-reliant industries. Low-cost and accessible connectivity models like the Reliance Jio network have begun to rapidly fill this gap. By 2025, the country is projected to have 850 million new online users, according to management consultancy BCG.

Internet users in India – Urban Rural divide, 2014-17

The TMT report by Deloitte, a global accounting and consulting firm, places the current population of online users in India at 400 million, which puts India in second place among the largest online markets in the world, behind only China. However, this still represents only 31% of the population, most of whom live in major urban centers.

Technology

It comes as no surprise, therefore, that Deloitte’s TMT predictions for this year are characterised by soaring revenues. Two major revolutions that are captivating the online sphere, both in India and across the globe, are the Internet of Things (IoT) arena and the Voice over LTE (VoLTE) technologies.

By 2020, the report predicts that IoT units in India will grow by as much as 35 times to reach 1.9 billion units, generating revenues of $9 billion, which is still considerably shy of the Government of India (GOI) target of $15 billion for the same period. Sectors where IoT is permeating the most include infrastructure, manufacturing, healthcare, agriculture, and digital supply networks.

India - Digital Ad Revenues (INR billion)

As big companies look to invest in the digital startup arena, startups comprise 60-65% of the total IoT firms in the country, into which venture capital firms have invested upwards of $60 million in the last three years. Meanwhile, VoLTE figures speak for themselves, as the technology is predicted by the report to have more than 5 billion subscribers across the world by 2023.

Media and communications

Given its direct dependence on technology, the media, entertainment and communications industry has been touted for monumental growth as well. Big Four professional services firm EY, for instance, predicted last year that the media and entertainment (M&E) industry would hit a staggering value of $35 billion by 2021. BCG had similarly massive estimates for the sector.

Moreover, the advertising industry is expected to capitalise on this growth as well. Deloitte predicts that the digital advertising sector, which currently stands at just over $2 billion (Rs. 133 billion), will grow to over $5.5 billion (Rs. 354 billion) by 2020. The estimates are higher than those of fellow Big Four firm KPMG, which predicts the digital advertising sector to grow to $4.6 billion by 2021.

Sporting Viewership (in millions)

One aspect that the TMT report examines with respect to growth in the M&E sector is the significant revenues generated by the numerous sporting entertainment events that have emerged in India. The Indian Premier League (cricket) and the Indian Super League (football), for instance, have substantial viewerships of 362 million and 224 million respectively. Other sports such as Kabaddi, wrestling, hockey, and badminton are also attracting huge numbers for their domestic leagues, at 220, 109, 43, and 36 million viewers respectively.

According to the leader of Deloitte’s TMT segment in India, Hemant Joshi, “People are using digital to augment their live experience – be this in buying and distributing tickets via their smartphones, or streaming events on ever faster mobile networks. And the pace and reach of those networks are likely to get steadily faster. The majority of voice calls have already moved to mobile networks. Now it is the turn of home broadband, thanks to the ever falling cost per gigabyte of data carried.”

With the formal launch of its digital segment Deloitte Digital in India this year, the firm is well poised to capitalise on these promising conditions.

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