Contents - Connect-World

National Development
Since NTP 99, the growth of the telecom
sector has been significant. Teledensity
increased from 1.44 per cent to
7 per cent, and rural tele-density
increased from 0.4 per cent to 1.5 per
cent. Cellular Mobile has grown from
1.2 million to 40 million subscribers.
Fixed lines have doubled to 45 million.
Public Call Offices have tripled to 1.5
million. Optical Fibre increased from
64,000 to 450,000 route kilometres,
and no place is 25 kilometres away
from Optical Fibre access.
Village Public Telephones are now
found in 85 per cent of the 600,000
villages. Tariffs have been reduced for
all types of service. Cellular tariff has
been reduced from Rs.16 per minute
to about Rs.2 per minute. National
Long Distance tariffs have been
reduced by 62 per cent, International
Long Distance by nearly 50 per cent,
and Internet telephony will reduce
them further still.
A Universal Service Fund Administration
has been set up to provide financial
support for voice and data telecommunication
access in non-viable areas.
In spite of the significant growth in
tele-density, there is still a divide
between what may be called Bharat
and India. While urban tele-density
exceeds 15 per cent, rural penetration
is only 1.5 per cent.
In the Southern states, tele-density
averages 7 per cent, but the East has
barely 2.3 per cent. More alarmingly,
some large states like, UP, MP, Orissa
and Bihar have tele-densities of only
one per cent to two per cent.
Although India has a TV penetration
of nearly eight per cent, the PC penetration
is only 0.54 per cent. The total
Internet subscriber base is less than
four million. Urban tele-density is
close to the global average, but there is
a wide variation between urban and
rural tele-densities, and sharp regional
variations as well. Globally, the
North is more developed than the
South, but in India, it is the other way
round. Universal access and
Universal Services will require large
funds and massive efforts by all the
states.
In the USA, where universal services
consists of support to high cost areas,
low-income subscribers, rural health
care, schools, and libraries, household
penetration is more than 90 per cent.
Even in such a situation, in 2002, the
USAs funding for Universal Services
was $5.9 billion. In India, the total
funds available until the end of the
10th Five-Year Universal Services
Plan are projected to be in the region
of $2 billion.
While reforms and competition in the
telecom sector has led to a rapid
growth of the network and sharp
reduction in tariff, they have also
squeezed Average Revenue Per User
(ARPU). However, the growth in subscriber
base and consequently the
increase in traffic will lead to
enhanced revenue volumes and thereby
protect profitability. An innovative
approach will be needed to attract the
new subscribers.
The myth that cellular services will be
offered only in metropolitan and
urban areas has been exploded. The
incumbent has already provided
access to Mofossil areas and increased
the subscriber base substantially to
achieve critical mass. With a tele-density
of only six per cent, there is a huge
potential market. With the telecom
and information technology industry
in doldrums in the developed countries,
India—with rates of growth second
only to China—should be a major
destination for new investments.
Since tariffs have already gone down,
further commoditisation of services
may not be significant. However,
building brand image through
improved and innovative value added
services in a converged environment,
improved customer care, and content
development will become increasingly
dominant.
The ongoing vertical and horizontal
integration of the sector will consolidate
the sector. Accordingly, four or
five major players will provide most of
the services countrywide.
The proposed unified licence regime
will facilitate the convergence of services
and the synergetic consolidation
of the sector. In the urban areas,
broadband services will become
increasingly available through new
wireless technologies and through up
grading of the existing wire-line network.
In a technologically neutral
regime, robustness, scalability, and
affordability will be the key factors
driving down costs. This may well
encourage "competitive cooperation"
and sharing of the infrastructure in
the best interest of the users.
With the telecom sector poised for
higher growth rates, it should be possible
to exceed the 10th Five-year Plan
11.5 per cent tele-density target. In
fact, the NTP 99 target of 7 per cent
tele-density by 2005 and 15 per cent
by 2010 will be more than exceeded.
However, one of the prime concerns is
to ensure accessibility and availability
of telecom services in areas that would
not otherwise be commercially viable.
In a vast country like India, with low
penetration of communication facilities,
opportunities will arise continuously
to promote the telecom sector
and create an environment for facilitating
growth in other sectors.
In short, India:
ˆ Has the fifth largest telecom network
in the world;
ˆ Is the second largest telecom market
in the world, next to China;
ˆ Has over 80 million telephones and
more than 46 millions cell phones;
ˆ Adds 2 million new phones per
month;
ˆ Requires an investment of US$ 70
billion to meet its 15 per 100 tele-density
target by 2010.
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