The telecom and digital sector witnessed the highest increase in its share in the overall capex across industries in the past 5 years. Analysts now expect the share of the telecom and digital sector to rise further over the next few years as telecom firms prepare for massive investments to roll out 5G services.
It is to be noted that the share of the telecom sector is up from 9 percent during 2013-2017 to 17 percent during 18-22. The share in the capex pie is likely to get even bigger in the next five years as the roll-out of 5G services picks up pace.
According to a report published in the Business Standard, analysts now expect the share of the telecom and digital sector to rise further over the next few years as telecom firms prepare for massive investments to roll out 5G services.
According to some estimates, this may cost Rs 2 trillion to 2.25 trillion for merely putting the network in place. Airtel and Jio have set a target to cover at least 75 percent of the country with 5G services by March 2024.
Moreover, telecom companies bought 5G spectrum in a recently held auction for over Rs 1.5 trillion, which they have to pay via instalments over 20 years.
However, many sectors witnessed their share in overall capex decline in the past five years. In the overall capex, the share of auto sector, which was already witnessing a demand slowdown ahead of the Covid pandemic declined from 10 percent in 2013-17 to 7 percent in 2018-22.
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