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According to a report by media agency Zenith, India is set to be the fastest growing market for telecom advertising between 2020 and 2023 in the world. What's more, the Indian telecom sector in the country will register 11% annual growth by 2023.
Crunching the Numbers for Telecom Advertising
This growth is mostly driven by 5G related buzz in the country. The next generation of mobile telephony is expected to launch in the last quarter of this year.
Interestingly, this estimate is much higher than the telecom advertising globally. The latter is which is expected to grow at 4.5% a year to 2023 on average. In the report, telecom segment makes up the services and equipment which supports the transmission of voice calls and data over landlines and mobile networks.
Telecom ad spend in the 12 key global markets will see an increase of $900 million year-on-year. The telecom advertising will go from $17.8 billion in 2020 to $18.7 billion in 2021. By 2022, the same will return to its pre-pandemic level of $19.5 billion.
Right now, only 31% of the population in India has a smartphone. This is changing due to the launch of low-price handsets such as the JioPhone.
The report also projected a positive light on smartphone sales. It expected the sales to start this year once consumers feel more confident in their future. Interestingly, in India, consumers are becoming more willing to finance and purchase handsets independently from their network providers. This is another key factor in the estimated growth, as many flagship smartphones are offered by telcos in India.
However, the report also predicted that the data packs are sure to get more expensive over the coming months. This will help telcos to recoup their investments in 5G infrastructure and spectrum.
Telecom Advertising - The Global Situation
Globally, telecom brands are cutting back their spending on traditional media platforms. Zenith forecasts a reduction in TV and radio ads and an increase in digital ads over the next three years, till 2023.
- Telcos will reduce their TV ad spend by an average of 2% a year.
- They will also reduce their Radio ad spend by 2.8% a year.
- Telcos will increase their digital ad spend at an average rate of 5% a year.
By 2023, digital advertising will account for 54% of all telecom advertising, indicating a paradigm shift.
Most of the global markets are forecast to grow between 3% and 6% a year to 2023. However, Russia will grow at 8% and France will do so at 6%. India is an outlier in this regard as it will be the only key global market to achieve double digit growth.