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Indian Telecom Sector:
India is the fourth largest telecom market in Asia after China,
Japan and South
Korea. The Indian telecom network is the eighth largest in the
world and the
second largest among emerging economies.
Indian telecom sector has undergone a major process of
transformation throughsignificant policy reforms. The reforms began
in 1980s with telecom equipmentmanufacturing being opened for
private sector and were later followed byNational Telecom Policy
(NTP) in 1994, NTP'1999 and Broadband Policy 2004.
With 359 million telephone subscribers today, India now boasts
of having the
second largest telecom network in the world after China. The
country is addingsome 8.5 million to 10 million new mobile
subscribers to the network every month
to also emerge as one of the fastest growing telecom markets in
the world.
The telecom industry also saw an estimated $8.5 bn in investment
flow in during
2006-07 alone, of which $550 million was in the form of foreign
direct investment.
All major telecom handsets manufacturers have their presence in
India, so do the
leading global service companies and infrastructure majors.
The next phase of growth will be in the country's vast rural
areas that would
bring more development. Also, with a tele-density of just 8
percent in rural India,as opposed to 50 percent in urban centers,
the hinterland offers good scope for
expansion.
The Telecom sector in India has witnessed unparalleled growth by
globalstandards. In a little over a decade of wireless telephony,
India has moved from asubscriber base of zero to becoming the
second-largest market in the world afterChina. We are hopeful that
the progressive policies would facilitate growth andevolution of
this sector by providing impetus to free flow of investment, ideas
andtechnology. The progress in the sector has been something to be
proud of and itis often viewed as ample testimony to the India
growth story.
Several developments in the industry are afoot, which will be
crucial to definingthe state of this industry in times to come.
Additional 2G spectrum has beenrecently allotted, allowing the
entry of several new players wherein a majorityof them are also
acquiring strategic international partners, commencing
theglobalization of Indian Telecom. The rollout of 3G, which could
potentiallytransform the bouquet of services extended to consumers
from vanilla voice andbasic data to rich entertainment and far
more, is poised for a take-off with the
http://cii.in/documents/ICT/NTP1999.pdfhttp://cii.in/documents/ICT/Broadband%20_Policy2004.pdfhttp://cii.in/documents/ICT/Broadband%20_Policy2004.pdfhttp://cii.in/documents/ICT/NTP1999.pdf
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impending auction of the 3G spectrum. Broadband conventional as
well aswireless is poised for a major leap. In the wake of such
developments, aconcerted effort must be made between the industry
and the Government (as theprime mover and regulator on policies in
Telecom) on ensuring that policies,regulations and laws are
formulated in a manner that creates systematic growth
and harnesses the full potential of this industry for the Indian
consumer.
Confederation of Indian Industry CII, in collaboration with
Ernst & Young, has puttogether the report India 2012: Telecom
Growth Continues, which brings outthe current status of the
industry with a brief perspective on how that growth hasbeen
achieved, and sets the context for the landscape in 2012. It
focuses oncurrent issues and the envisaged future concerns and
potential points of debate,which would need to be jointly addressed
by the industry and the Government inorder to enable this industry
to continue on its already-impressive growthtrajectory, and become
the cynosure of the Telecom world.
Report highlights some focus areas that will need attention in
order tomaintain a positive outlook for 2012:
Rural market will be the next growth driver for operators with
the nearsaturation of urban markets.
Emphasis on data revenues to provide additional buffer: The
launch of3G services will drive data revenues.
Operators will have to lay a larger focus on active and passive
sharing.MVNOs and other sharing methodologies will gain further
traction.
Need to revisit the high levies on the Telecom sector:
Revisiting highduties and levies in the sector would help reduce
operational costsincurred by the operators and the benefits can
eventually be passed on tothe customers.
The allocation of adequate spectrum is an urgent requirement for
new andexisting operators. A clear roadmap for future spectrum
allocation has tobe drawn, whether it is a 2G or 3G platform.
Enhance the skill sets of personnel for employment in the
Telecom sectorto meet the needs of the Telecom industry for
2012.
No major impact on telecom industry from the current financial
crisis isseen. Despite the global slowdown, the demand for new
mobileconnections in India is expected to be robust, backed by the
strongmonthly net additions
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The report concludes on the outlook for the Telecom sector in
2012 ashereunder:
Wireless subscriber growth is estimated to continue till 2012 as
India
projected to garner about 640- 650 million mobile
subscriptions.Fixed line subscriber base is expected to reach 45-50
million, largelydriven by broadband growth.Nearly half of the
projected mobile subscriber additions are likely toemerge from
rural areas.The availability of adequate spectrum could become a
hurdle for futurewireless growth.Mergers and acquisitions are
expected to reduce the number of operatorsto 57 key players by
2012.3G and WiMAX services are expected to gain popularity,
initially in the top20 cities and gradually in the rest of the
country. Mobile entertainment and
mobile banking are likely to emerge as key data services.MVNOs
will begin targeting the niche customer segment by
providingdifferentiated product offerings, which will further
intensify competition.Finally, India will have a broadband
subscriber base of 25-30 million andan internet subscriber base of
45 million.The mobile is deemed to emerge as the principal means to
access theinternet in the next stage of evolution of Telecom
services.Looking ahead, the growth momentum will continue in the
Indian telecomsector over the period 2008-2012. The nature of this
growth will howeverundergo a major transformation. Rural telecom
and data services will bethe principal drivers of this growth.
Policy and regulation will become
increasingly important to support and guide this growth
andtransformation.
For requesting the report, please send your request to
[email protected]
Important links for Indian telecommunication sector:
Department of Telecom, Ministry of Communications &
Information Technology:http://www.dot.gov.in/
Telecom Regulatory Authority of India:
http://www.trai.gov.in/Default.asp
mailto:[email protected]://www.dot.gov.in/http://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asphttp://www.dot.gov.in/mailto:[email protected]
