India is expected to have a billion smartphone users by 2026 as 5G services are rolled out, according to the India edition of Deloitte's 2022 Global TMT (Technology, Media and Entertainment, Telecom) report. That's a good 250 million more smartphone users than than the 750 million users out of 1.2 billion mobile subscribers in 2021.
Over the period, India is also set to become the second-largest manufacturer of smartphones. Smartphone shipments in India are expected to reach 1.7 billion units from 2022 to 2026 creating a $250 billion market on the back of major policy reforms says Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India. 5G-enabled devices will contribute 80% to devices being sold in 2026 and Indian consumers will purchase 840 million 5G smartphones over the next five years valued at $130 billion. In addition, 5G will fuel an incremental sale of 135 million smartphone units over the next five years, says the report.
Much of the growth will be driven by the rural market which is expected to grow at a compound annual growth rate (CAGR) of 6%, compared with 2.5% for urban India from 2021 to 2026. Demand for smartphones in India is expected to increase to about 400 million smartphones in 2026 from 300 million in 2021. This demand is expected to be driven by the roll-out of 5G services and adoption of e-learning and fintech platforms in rural India. That will get an additional push with Bharat Net aiming to connect all villages with fiber by 2025. It estimates that by 2026, 80% of the devices added will be 5G enabled.
The government's $10 billion incentive package for semiconductor and electronics manufacturing has the potential to create an ecosystem for manufacturing electronic products. As the ecosystem matures in the medium to long term, Deloitte expects India to emerge as a regional hub in semiconductor and electronics manufacturing.
5G is also expected to become the fastest-adopted mobile technology due its diverse applications, such as high-speed gaming and remote healthcare.