GOVERNMENT SPEAKS  

"My top priority will be rural telephony...to provide facilities to the lowest ebb of the society"

Andimuthu Raja Union Minister for Communications and Information Technology
Government of India

INDUSTRY SPEAKS

"The Indian Government has given unstinting support to the telecom sector, which is a critical  infrastructure for economic growth of the country and has a direct multiplier effect on the economic growth."

Cellular Operators Association of India

"The Indian IT industry has now reached a stage of maturity where it can be a very reliable and safe partner for meeting the requirement of our global partners. While we are yet very cost competitive, the Indian it industry has gone beyond that and is providing unique scenario to
customers in terms what they need."

Kiran Karnik, President, NASSCOM

LEADERS SPEAK

"India today is one of our top priorities in Asia Pacific, and we remain fully committed to service in the market."

Allen Ma, President, BT Asia Pacific  

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"Realization of the importance of information security is increasing, in the case of new players in particular. If India is somehow viewed as a a place where information is not secure, then that would reverse the outsourcing trend for India."

Harris Miller, President, IT Association of America (ITAA)

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"India’s positioning as the primary global offshoring destination (along with China) will ensure that the country’s economy rapidly grows and its people will see the benefits." 

Martyn Hart, Chairman, National Outsourcing Association (NOA), UK

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"The story of Indian companies needs to be told i.e. how they are creating local jobs and opportunities. How they are allowing US companies to stay in business and be competitive. How productive increases in the US have to do with the Indian IT industry too."

Sanjay Puri, Chairman, US India Political Action Committee (USINPAC)

BSNL

Hutch

TATA Indicom

IDEA

Aircel

Reliance

Spice

India Unstoppable

"To provide the communication facilities to the people at the lowest ebb of the social order" is his prime objective and synchronizing this "his top priority area would be rural telephony." This is the crux of the message that India's new Communications and Information Technology Minister Andimuthu Raja sought convey to the people of the country, to the ICT world in particular. Out of total 607491 villages in the country, 552824 villages have been provided Village Public Telephone (VPT) facility as on March 31, 2007.

Bharat Sanchar Nigam Ltd (BSNL) has entered into an agreement with Universal Service Obligation Fund (USOF), DOT in November, 2004, for providing VPTs facility to 66822 accessible, undisputed and undisturbed uncovered villages having population more than 100 as per census 1991, which are planned to be provided with VPT facility progressively by November, 2007. Out of the awarded village, BSNL has provided VPT facility to 46969 villages up to 31.03.2007.

Also, a scheme is being launched by the government to provide support for the provision of mobile services, including WLL services, in specified rural and remote areas, where there is no existing fixed or mobile services and is likely to be made operational by June, 2008. About 2.12 lakh villages are likely to be covered under this scheme.

Since the telecom sector is a growing sector, all efforts required to maintain the growth tempo will continue, the minister assured the countrymen immediately after assuming the charge of his new portfolio. According to indian telecom regulatory authority, TRAI, the total number of telephone subscribers have reached 212.02 million at the end of April 2007 as compared to 206.83 million in March 2007. The overall tele-density has increased to 18.74 in April 2007 as compared to 18.31 in March 2007. In the wireless segment, 5.15 million subscribers have been added in April 2007 while 3.53 million subscribers were added in March 2007. The total wireless subscriber (GSM, CDMA & WLL (F)) base is 171.20 million now.

Total Broadband connections in the country have reached 2.43 million by the end of April 2007. The total number of existing ISP licencees is 382. India has set a target of providing 9 (nine) mn broadband connections by this year end and 20 mn connections by the end of 2010. The Parliamentary Consultative Committee attached to his Ministry, was recently posted about the availability of new disruptive wireless broadband technology, such as Wi-MAX. It is expected to start adding more than a million broadband connection per month before the end of 2007. Wire line and wireless broadband to co-exist and expand together, New applications such as tele-aid medicines, IPTV, video conferencing, e-governance, e-commerce, etc., will be available to the citizens with broadband availability. Special emphasis will be for North-Eastern States and Jammu & Kashmir.

The targets to be achieved under the broadband initiatives, broad strategy and action plans prepared by the BSNL and Mahanagar Telephone Nigam Limited (MTNL). It is envisaged under the action plan, that broadband coverage of all secondary and higher secondary schools, public health care centers and Village Panchayats would be provided by the year 2008. Broadband connectivity to one lakes Community Service Centers (CSC) covering 20000 CSCs by ADSL by September 2007;1000 blocks by wireless broadband by December 2007 and the remaining 5000 blocks by wireless broadband with USO support by June 2008 would be provided. BSNL, as part of their action plan, have envisaged to add an average of 5 lakh broadband connections per month from January 2008. 80 percent of the exchanges would be broadband by the end of 2007 and roll out of IPTV in major cities.

In addition to this, BSNL will aggressively roll out high speed broadband (like Wi-MAX) services and allow integration of multiple access technology like ADSL 2 +, VDSL 2, fibre-home, Wi-Fi, Wi-MAX, 3G, CorDECT, etc. The focus will be to provide multi-play instead of triple play. As a part of the strategy, MTNL has envisaged a target of providing one million broadband connections by the end of this year and addition of an average one lakh connections per month from January, 2008. It has also decided to stren Its IPTV services which have been recently rolled out fully in Mumbai and in limited areas of Delhi.

To provide support from USO fund for mobile and broadband services in remote/rural areas, the Indian Telegraph Act has been recently amended. He also informed the members about the relaxation of restrictions of providing mobile services within 10 kms. of international borders to 500 metres except along the Line of Control and Line of Actual Control in the areas of Akhnoor and Pathankot of J&K.

In the growth of telecom sector, the Indian cellular industry is playing a very significant role. Today, the number of mobile subscribers has exceeded the number of fixed line subscribers and continuing to grow, claims the Cellular Operators Association of India (COAI). The industry has so far invested over Rs 60,000 crores in setting up 150 state-of-the-art cellular mobile networks serving about 4000 cities/towns and over 6000 villages spreading across the country. Of this networks 83 are of GSM which accounts for about 80 percent of mobile facility.

Meanwhile, COAI has welcomed Indian telecom regulator TRAI's recommendations on infrastructure sharing. COAI Director General T.V. Ramchandran maintains that there should be a Joint Working Group to take spot decisions with regard to infrastructure in critical locations. This would address one of the main concerns of the industry with regard to provision of seamless services.

Referring to TRAI recommendation that the total amount charged per tower should not be more than 1.2 times the amount being charged from individual service providers Ramchandran says this would definitely make infrastructure sharing an extremely attractive proposition as all operators are looking at ways and means to reduce their costs.

However, commensurating the subscriber-base expansion, revenue growth has not been proportionate, so says COAI. Duties and levies are also very high, they maintain. This is impacting availability of resources to fund network expansion and growth to rural and uncovered areas. "This is one of the reasons why even today a very large portion of rural area is still uncovered and the benefits of the telecom services are yet to reach a vast majority of population" COAI told the government.

The ministry's report to the Parliamentary Committee also pointed out that "the robust telecom network has facilitated the expansion of BPO industry which is having five lakh employees now and adding 400 employees per day." This apart "Mobile telephone has now become the highest selling consumer good with about 30 million hand sets sold in 2005 displacing bicycles from the top slot". About one of the major concerns- providing service at an affordable price to the common man- the current tariff is "one of the lowest in the world now".

The business friendly atmosphere , growing domestic market and cost-friendly service providers are making India more and more attractive to invest in IT and Telecom. In telecom 100 percent FDI is permitted whereas in telecom services sector the FDI ceiling has been raised to 74 percent from 49 per cent. A number of world IT leaders have already announced their India investment plan. Microsoft to invest $ 1.7 billion in a phased manner over four years; Intel to invest over $ 1 billion. CISCO is also planning to invest in India $ 1.1 billion including $ 750 million for an R&D Centre. During the last one and half years, all these major world players have announced investments in India to the extent of over US $ 18 billion (about Rs.80,000 crore). This reflects the investment friendly climate in India.

FDI investments in Telecom and IT Sectors (Major Projects) in 2005–2006

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Updated on May 29, 2007