Indian telecom emerges 2nd largest in the world

Indian telecom continues to register a significant growth in the current fiscal year. This has been due to the impact of economic reforms and pro-active policies of the government.

Today, Indian telecom network with about 364 million connections in October 2008 is the third largest in the world .Indian telecom has achieved another milestone as it has become the second largest wireless network in the world by surpassing USA. With the current pace, where about nine million telephones are being added every month, the target of 500 million connections by 2010 is well within our reach.

Official statistics say: The total number of telephones has increased from 76.53 million on March 31, 2004 to 363.95 million on October 31 2008. While 94.63 million telephones were added during the twelve months of 2007-08, about more than nine million subscribers are being added every month during the current fiscal year. Tele- density has also increased from 12.7 per cent in March 2006 to 31.50 per cent in October 2008. Rural teledensity increased to 13.4 per cent in October 2008 with 109.05 million rural telephone connections. Urban teledensity on the other hand has been 74.61 per cent in October 2008.

The growth of wireless services has been phenomenal, with wireless subscribers growing at a compound annual growth rate (CAGR) of 87.7 per cent per annum since 2003. Today, the wireless subscribers are not only much more than the wireline subscribers in the country, but also increasing at a much faster pace. The number of wireless phones has been 325.7 millions as on October 2008. The share of wireless phones has increased from 24.3 per cent in March 2003 to 89.50 per cent in October 2008. Improved affordability of wireless phone has made universal access objective more feasible.

Government has taken several steps to encourage participation of private players to create a competitive environment in this sector. These measures were directed at removal of state monopolies, reduction in entry barriers to new firms, creation of a level playing field between incumbents and new entrants, and most importantly, forward looking and even-handed regulation which has promoted competition and also effective consumer interests. Consequently, the private sector is now playing an important role in the expansion of telecom sector. The share of private sector in total telephone connections is now 77.44 per cent as per the latest statistics available for October 2008 as against a meager 5% in 1999.

Rural telephones have gone up from 12.3 million in March 2004 to 109.05 million in October 2008 with a teledensity of 13.04%. The target of 100 million rural telephones by 2010 has been achieved well in advance. Out of more than 22.71 lakh Public Call Offices (PCOs) functioning in the country, two lakh are in the rural areas. The Mobile Grameen Sanchar Sewak Scheme providing telephone at the doorstep of villagers in about 12,000 villages is also in place.

To provide infrastructure support for mobile services, a scheme has been launched by the Government to provide support for setting up and managing 7871 number of infrastructure sites spread over 500 districts in 27 states of the country for the provision of mobile services. The infrastructure so created, shall be shared by three service providers for provision of mobile services. Mobile services from these towers are likely to be launched in a phased manner by the end of year 2008. As on 30.09 2008, about 1589 towers have been set up under this scheme. Mobile services from 1517 BTSs installed on many of these towers have also started.

It is also envisaged that internet and broad-band subscribers will increase to 40 million and 20 million, respectively, by 2010. As per the latest available statistics for September 2008, about 5.7% villages have broadband coverage and the number of rural broadband connections is 1.55 lakh.

With the aim to provide e-governance and data services to the rural masses, a proposal is being considered to provide support of broadband connectivity in rural and remote areas of the country in a phased manner. Under this scheme, 5000 blocks shall be connected by wireless broadband and villages coming within a radius of 10 kms. Of the taluk/block headquarters shall be covered by such connectivity.

To achieve the stipulated target, the government has issued guidelines for Broadband Wireless Access (BWA) Services. Introduction of BWA services will enhance the penetration as well as growth of broadband subscribers.

Indian telecom industry manufactures a complete range of telecom equipment using state of the art technologies designed specifically to match the diverse terrain and climatic conditions of the country. Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecom, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last four years saw many renowned telecom companies setting up their manufacturing base in India.

During 2008-09, production of telecom equipment is expected to increase from Rs,412,700 million (2007-08) to Rs. 518,000 million. During 2007-08, highest increase has been recorded in wireless equipment manufacturing including cellular mobile phones where the production has gone up from Rs.105,450 million in 2006-07 to Rs. 286,000 million in 2007-08, recording a growth of 171%.

Foreign direct investment (FDI) is one of the important sources to meet the huge funds that are required for rapid network expansion. The FDI policy provides an investor-friendly environment for the growth of the telecom sector. The policy of the Government of India is to strive to maximize the developmental impact and spin-offs of FDI. At present, 74% to 100% FDI is permitted for various telecom services. The total FDI equity inflows in telecom sector have been 1261 million USD during 2007-08.

The government is now looking forward to achieve the target of 600 million telephone subscribers by the end of Eleventh Plan and to achieve rural teledensity of 25% by means of 200 million rural connections at the end of 11th Plan. It is also envisaged that internet and broad-band subscribers will increase to 40 million and 20 million, respectively, by 2010.

Exports in telecom ring in Rs 6,600 cr in six months

The total amount of exports made from the infian telecom sector during the last three years are as under:

2006-07 : Rs. 2523 Crore

2007-08 : Rs. 8131 Crore

2008-09 (April – Sept.08) : Rs. 6600 Crore (approx.)

The Government has taken following steps to promote export of telecom equipments:

(i) No Industrial licence is required for establishing manufacturing units

(ii) 100% FDI is allowed in telecom equipment manufacturing

(iii) Promoting setting up of Special Economic Zones

(iv) upgradation of Infrastructure

(v) deregulation in Imports and Exports

(vi) encouraging global manufacturers to set up units in India

(vii) setting up of Telecom Equipment and Services Export Promotion Council

This information was given by the Minister of State for Communications and Information Technology, Jyotiraditya M. Scindia in the Lok Sabha today.

Now, Samachanr in 9 languages on Reliance Mobile

Subscribers can get text news in 9 Indian languages through Samachar Service

Focus on providing value added services in subscriber’s preferred language

Mumbai: Reliance Communications, India's leading telecom service provider has announced the launch of "Samachar" service on Reliance Mobile Phones. The service provides text news in Hindi, Bengali, Gujarati, Kannada, Malayalam, Marathi, Punjabi, Tamil and Telugu. The service benefits millions of subscribers of Reliance Mobile across the nation as they can know the latest news in their preferred languages at the touch of a button. The service is powered by Webdunia.com, the pioneer in Indian languages in mobile and web applications.

The launch of this service is inline with the vision of the company to provide content and services to customer in their favorite languages.

Announcing the launch of these services in Hindi, Mr. Krishna Durbha, Head - Value Added Services, Reliance Communications said, "We have been providing value added services in various Indian languages for over five years. The launch of Samachar, that's news in nine languages, will help us grow VAS usage and penetration."

To check the latest news, subscribers have to go to R World>News N TV> Samachar.

Webdunia.com :

Founded in 2000, Webdunia has a proud history of leading the language portal industry in multilingual content, product development, technological innovations and localization. Webdunia has played a commendable role in advancing language content in the country.

Webdunia is one of India's leading popular Indian languages portal available in Hindi, Bengali, Gujarati, Kannada, Malayalam, Marathi, Punjabi, Tamil and Telugu. With more than 80 million page views in India, Webdunia is the first Indian Language Portal that has emerged as a Web 2.0 revolution in the country by means of regional languages.

Believing in 'Think Global, Act Local', Webdunia has been able to develop some of the finest localization projects for the clients worldwide.

MTN intends to renew stake sale deal with RCom

Reliance Communications and MTN deal, which knocked the headlines in July, and subsequently collapsed due to Ambani’s bitter dispute, may soon be renewed.

Says Wireless Federation - A Wireless Industry Research Conglomerate - quoting media reports that the story has a twist this time, as the roles are reversed.

Earlier, Rcom was seeking at a reverse merger to buy MTN, this time the offer is for a straight deal with MTN buying a minority stake in RCom. Rcom is seeking to raise $2 billion by offloading around 26% stake in the company, which will be a mix of non-promoter stake and fresh issue.

AT&T which plans to re-enter the Indian Telecom Market is also chasing, since it is not interested in investing in Unitech. The company’s move to sell stake to a strategic partner comes after talks with a host of private equity players did not make any headway.

Expect more from mobile as telecom race set to intensify

by B N Kumar

MTNL offers calls at 10 ps/mt under group scheme. Reliance is offering calls at 50 paise a minute in a prepaid package. Virgin has already offered 10 paise for incoming calls. This is just an indication of the windfall gains that a mobile subscriber can expect in the days to come.

The race among mobile telecommunication service providers translates in to a growing opportunity estimated at more than 700 million by 2012 from the current 300 million, at a CAGR of 21%, says strategic research company IndusView that advises multinational companies on business opportunities emanating from India’s fast growing economy.

IndusView says in an email response that “Communication is a necessity.” “The related costs of owning a handset and usage charges (tariffs) in India are among the lowest in the world. To add to that, the service providers are offering innovative tariff packages even while touching the lowest band and are willing to further lower the packages to bring new subscribers in to their fold,” says Mr. Bundeep Singh Rangar, Chairman of IndusView Advisors Ltd.

Apart from the vanilla voice and text services that the mobile services are widely associated with, the advent of next generation platforms like 3G and progressively 4G, will exponentially accelerate the possibilities of innovative applications that can be bundled on to the networks and delivered at the subscribers' finger tips in the hi-tech mobile handsets, Mr Rangar says.

The subscriber growth targets and evolving technology landscape calls for corresponding high capital investments which is pegged at about $73 billion over the next five years. And, a major chunk of the investment is expected to be realized through Foreign Direct Investment (FDI), particularly in the area of mobile communication.

The recent string of investments in Indian telecom companies, including, Tata Teleservices Ltd by NTT DoCoMo, Inc; Unitech Telecom, the telecom arm of India's second largest real estate developer Unitech Ltd by Norwegian telecom firm Telenor ASA, world's seventh largest telecom service provider at $1.36 billion; and Swan Telecom, a start-up GSM telecom service company of a Mumbai-based real estate developer Dynamix Balwas Group by Dubai-based Emirates Telecommunications Corp (Etisalat) at $900 million; or, South Africa's largest telecom company MTN Group's attempts to enter the Indian market are examples of overseas companies that have exhibited confidence in the potential of the Indian market.

Stating that the country’s tele-density has jumped to about 30% now from less than 1% in the 80s, Mr Rangar points out that there is still a large population that needs to be offered the benefits of the basic communication services – that is how the target of achieving a tele-density of about 45% is set for the next five years by the government of India. The service providers – both the state owned and the private sector – would be aiming to surpass that target and garner the maximum possible chunk of that potential subscriber base.

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Indian telecom leaps into 3G; MTNL rolls out service

Prime Minister Dr Manmohan Singh launched the country’s first third generation (3G) mobile services in New Delhi on Thursday that will provide high speed transfer of voice, data and video. He also inaugurated India Telecom 2008, India’s leading international conference and exhibition for the entire telecom system. The two day event is jointly organized by Department of Telecommunications and FICCI. The Prime Minister released a report prepared by Capgemini, the knowledge partner for this year’s Telecom summit on the Indian telecom market.

Communications and IT Minister for Communications and IT, Mr. A. Raja made a video call to Dr. Singh using a 3G enabled handset signaling the debut of the high quality service in India. The video streaming applications like ‘live TV’ was also demonstrated at the inauguration. The public sector MTNL is rolling out the 3G service in the capital making use of the necessary Spectrum allocated to it by DOT. The services will be available early next year in Mumbai and Chennai.

Speaking on the occasion, Thiru A Raja announced that within one year, all mobile phone subscribers in the country can switch from one operator to another operator providing better services while retaining their numbers. He informed that the DOT has accepted the Mobile Number Portability recommendations, which were pending since 2006. MNP is likely to be implemented in the Metros and category "A" circles by middle of 2009 and in the entire country by the end of 2009. It will promote competition among the operators to provide better quality with more value added services at lower tariff.

Mr. Raja informed that after migrating to revenue sharing regime, the telecom sector has contributed about Rs 50,000 crores through license fee, entry fee and spectrum charges till the end of last financial year. During this financial year alone, it is expected that about Rs 16,000 crores will be collected from the license fee and spectrum charges.

On the issue of new licenses, the Minister explained that the policy of "NO Cap" on number of service providers in a service area has been adopted, as per the recommendations of TRAI. New licenses have been granted under this policy which will bring enhanced competition, faster growth, lower tariffs, bridging the digital divide between rural and urban areas. He pointed out that existing players have already reduced their tariffs and number of additional subscribers per month has increased.

On further reduction of tariff, Mr. Raja said, TRAI has been requested to re-look into the existing Mobile Termination Charges, as the cost per line has substantially reduced due to technological advancement and increase in traffic.

Mr. Raja informed that DOT has been able to locate sufficient unutilsed 2G spectrum and allot additional spectrum to all the existing operators as well as to new licenses in most of the circles. He said, the coordination of spectrum in other circles is continuing and it is hoped that the requirement of all the operat

Level playing field for old and new telecom players

Are the new entrants to telecom field being unduly favoured by the telecom Ministry?

An adage which is much older than the Indian Telegraph Act 1885 says that you cannot compare an apple with an orange. Even in telecom, an Orange (pun unintended!) has to be compared with an orange. That is what level playing field is all about, says a top telecom ministry official.

Asked to comment on the widespread allegations that certain new telecom players like Swan Telecom and Unitech have been unduly favoured as they secured spectrum on the basis of fee pegged in 2001, the official explained that the price has not yet been changed ever since deliberately.

“One has to keep in mind the government’s overall objective of growth, affordability and even penetration of wireless service in small towns and rural areas,” he said and pointed out that even TRAI does not favour any change in the fee structure and auction for spectrum.

The unchanged license fee also serves as incentive to telecom players to extend their networks to relatively low-revenue semi urban and rural areas. Otherwise, the government would have to subsidise the rural network expansion, the official said.

Even when the Cabinet decided on pricing for the fourth operators in 2003, it was based on TRAI recommendation and the same principle was applied last year when the new entrants were given licenses.

The government fully respected the telecom industry’s argument for a level playing field for all players and hence did not impose any restrictions for its growth. “This has also immensely contributed to the country emerging as the world’s fastest growth telecom market, adding over 8 million subscribers every month,” the official explained.

The country wireless subscriber base is 300 million strong today and is expected to double to 600 million mark in the next four years.

Any increase in the fee or allowing spectrum to be auctioned would in effect mean injustice to new players as it could jeopardize the tariff structures. With the telecom market witnessing immense tariff war, the new players would have been put to disadvantage visa-vis the existing players and this would have gone against the principles of level playing field, the official said.

DoT has been maintaining that the new licenses have been issued as per TRAI policy guidelines.