Friday, January 26, 2007

India’s great leap forward in telecommunications is heralded as one of the country’s success stories. But big initiatives in rural expansion and evolution of government policy must gain momentum for rapid growth to continue.

“Getting to the very bottom of the pyramid has to be through transformative change,” says Kunal Bajaj, director of BDA India, a telecoms consultancy in New Delhi.

India’s Department of Telecommunications (DoT) has a target of 500m phone subscribers by 2010, including both mobile and land lines. Even if mobile phone subscribers only reach 350m to 400m, projected growth is remarkable considering telephone penetration was less than 2 per cent in 1998. Since India began telecom reforms the following year, coverage has quickly grown to 16.6 per cent and is on track to reach 22 per cent by the end of the year.

Land lines have been eclipsed by mobile phones, which can more easily clear infrastructure and bureaucratic hurdles. India late last year overtook China as the world’s fastest-growing mobile phone market in terms of new monthly subscribers.

In November alone, India added 6.8m new mobile subscribers, bringing total numbers to 143m.

Affordability has allowed mobile phones to spread rapidly. Fierce competition among mobile phone operators such as Bharti Airtel, Reliance, Hutchison Essar and state-owned BSNL has driven down rates to as little as 2 US cents per minute.

The cost of mobile phone handsets has also fallen to as little as $35 as manufacturers set up factories in India and the race is on to introduce a Rs1,000 ($22) handset this year.

Continue reading “Villages remain the challenge“?

Source: Financial Times (link opens in a new window)