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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

*

"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)

*

"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

*

"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)

*

"The prospects (of India and Australia forging an alliance to emerge as IT super power in the Asia-Pacific region) are very positive."

Rob Durie, CEO, Australian Information Industry Association (AIIA)

*

"India will continue to expand its market dominance in this (BPO) field, yet to prevent political backlash it will be imperative for India to provide U.S. companies greater market access, to reduce its trade deficit, and to continue to buy American, which would include meaningful defense cooperation."

Ron Somers, President, US India Business Council (USIBC)

*

"Information Technology is an important tool for fostering development. Global communications and the Internet are key engines of economic growth."

Don McKinnon, Secretary-General, The Commonwealth

*

"One of the key areas of cooperation under the ASEAN-India dialogue relations is science and technology with focus on IT. We have been working on a number of projects in the area of e-learning and information security system."

His Excellency Ong Keng Yon Secretary-General, Association of Southeast Asian Nations (ASEAN).

*

"Indian IT sector is very much part of our work to reduce the digital divide that we are working on."

Mohan Kaul, Director-General; Chief Executive, Commonwealth Business Council

*

"The CECA will in all probability smoothen some of these problems but a more proactive approach to attracting investments into much needed IT infrastructure can be adopted."

M. Rajaram, Chairman of the Singapore Indian Chamber of Commerce and Industry (SICCI)

*

 "Indian IT is strong and well-known. Our expectation is that India would relocate its Assembly Line (hardware, software and semi-conductor) industries into Cambodia. If this is possible Cambodia would be able to provide jobs to its people as well as to boost exporting."

Oknha Kith Meng, President, Phnom Penh Chamber of Commerce (Cambodia Chamber of Commerce)

*

GOALS

1. Seven million broad band subscribers by 2007

2. 20 million broadband and 40 million Internet subscribers by 2010, which traslates into penetration levels of 1.70 per cent and 3.40 per cent respectively

3. Broadband network of 10 million subscribers by 2010 and 35 million subscribers by 2020 in urban India across homes, enterprises and public kiosks.

4. Achieve broadband coverage by providing  access to at least 50 per cent of the rural population by 2010 and 100 per cent by 2020 through rural broadband kiosks.

5. Make appropriate and locally relevant e-education, e-Governance, entertainment and e-commerce services and employment opportunities available through broadband connectivity to all cities, towns and villages in India.

Department of Telecommunications, Ministry of Communications and Information Technology, Government of India

SERVICE PROVIDERS

Bharti

BSNL

Hutch

TATA Indicom

IDEA

Aircel

Reliance

Spice

MTNL

BPL

Iportant Links

Federation of Indian Chambers of Commerce and Industry, New Delhi

Telecom Regulatory Authority of India

Association of Basic Telecom Operators

Confederation of Indian Industries

Associated Chambers of Commerce And Industry

Indian Electrical & Electronics Manufacturers' Associatio

Electronic and Computer Software Export Promotion Council

Automobile Manufacturers Association of India

Automotive Component Manufacturers Association of India

Indian Machine Tools Manufacturers Association

Engineering Export Promotion Council

Federation of Indian Export Organisations

Manufacturers Association of Information Technology

National Association of Software & Service Companies

Electronic Components Industries Association

Association of Mutual Funds in India

Organisation of Pharmaceutical Producers of India

Indian Exporters Online

Computer Society of India

Electronics & Software Export Promotion Council (ESC)

Telecom Equipment Manufacturers Association of India (TEMA)

Consumer Electronics & Television Manufacturers Association (CETMA)

All India Instrument Manufacturers & Dealers Association (IMDA)

India Printed Circuit Association

Electronic Industries Association of Andhra Pradesh (ELIAP)

Export Import Policy, Customs and Central Excise, DGFT

Computer Association of Eastern India


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.


Catching up with global peers

The Indian ICT industry have, not only managed to catch up with their more technology savvy global peers, but are also being actively sought by companies worldwide for their on-site, offshore expertise and wealth of manpower resources. Indian ICT organizations are counted among the well known and reputed ICT solutions and services providers across the world and scores of global ICT leaders have invested in India, making the country their hub for software development, offshore outsourcing and R&D.

The software and ITES exports from India is likely to exceed US $ 31 billion during the current year 2006-07 against US $ 12.9 billion in the year 2003-04 – a compound annual growth of over 31% during the last five years. The IT sector has a share of 5.4% in the National GDP. The software and ITES exports from India are estimated to cross US $ 100 billion during the year 2012.

India has taken major strides in the area of telecom from a monopolistic approach till mid 90’s to the present day aggressive private and public sector competition. This has resulted in phenomenal improvements in tele-density, growing Internet penetration and rapid expansion of mobile telephony across the country. Today, India’s more than 200 million telephone network is one of the largest in the world and we are adding 7 million telephone subscribers every month. The PC sales are expected to cross 6.5 million units during the year 2006-07.

As a step to make the country an information and knowledge society, India has drawn up a National e-Governance Plan (NeGP) with 27 Mission Mode Projects for delivering Government and private services at the doorstep of the citizen. State Wide Area Networks (SWANs) are being established to extend data connectivity of 2 Mega bits per second up to the block level in the country. The Government has also approved a scheme, as part of NeGP, to establish 100,000 broadband enabled internet Common Services Centres (CSCs) in rural areas of the country to connect the citizens of rural India to the World Wide Web.

To foster all-round development in the Commonwealth fraternity, we had promoted the Commonwealth Action Programme for the Digital Divide (CAPDD). It is commendable that much work has been done within the Commonwealth to expand the contribution of ICT to socio-economic and civic development. Despite progress in some areas, the full potential and promise for the Commonwealth in the area of ICT for all-round development remains largely unfulfilled. The need of the hour is proper coordination and alignment at the strategic level, a clear strategic direction to collaboration within and outside the Commonwealth, and the presence of a consistent, dedicated funding.

(Extracts from Indian Communications and Information Technology Minister's inaugural speech at the International e-Partnership Summit in New Delhi, held on March 23, 2007)

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.

India: Cellular operators growth (As in March 2007)

Company

GSM 

Company

CDMA

1

Subscribers (In mn)

Market share (%) 1 Subscribers (In mn) Market share (%)
BSNL 27.42 19.00 Bharati 1.87 4.00
MTNL 2.7 16.00 HFCL Infotel 0.31 1.00
Hutch 26.44 10.00 Reliance Comm 25.18 57.00
Reliance 4.34 14.00 Shyam Tele 0.24 1.00
Aircel 5.51 19.00 Tata Teleservice 16.55 37.00
Spice 2.72 14.00 1 1 1
BPL 1.07 1.00 1 1 1
IDEA 14.01 7.00 1 1 1
TOTAL 84.28 100.00 TOTAL 44.18 100.00
Source: COAI

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.


Objectives of the National Telecom Policy

  • Make available affordable and effective communications for the citizens.

  • Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas and the provision of high-level services capable of meeting the needs of the country’s economy.

  • Encourage the development of telecommunication facilities in remote, hilly and tribal areas of the country.

  • Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and thereby propel India into becoming an IT superpower.

  • Convert Public Call Offices (PCOs), wherever justified, into Public Teleinfo centres offering multimedia services like Intergrated Service Digital Network (ISDN) services, remote database access, government and community information systems etc.

  • Transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players.

  • Strengthen research and development (R&D) efforts in the country and provide an impetus to build world-class manufacturing capabilities.

  • Achieve efficiency and transparency in spectrum management.

  • Protect the defence and security interests of the country.

  • Enable Indian telecom companies to become truly global players.

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".

Physical Performance of Telecom Sector
(In lakh lines)

Scheme Ninth Plan Achvnt Tenth Plan Targets 2002-03 Targets 2002-03 Achieve-ment 2003-04 Targets Achieve-ment 2004-05 Targets Anted. Achieve-ment 3 yrs. Anted Achieve-ment (in %)
Tot. DELs
236.01
650.23
69.83
96.48
64.11
219.23
132.56
448.27
68.94
Fixed
-
96.89
25.03
23.32
14.00
-2.47
20.49
41.34
42.67
WLL
-
62.93
13.43
10.60
16.61
87.03
25.50
123.13
195.66
GSM
-
235.41
31.37
62.56
30.00
134.67
81.57
278.80
118.43
BSNL
218.86
367.67
64.34
47.70
60.61
34.60
100.00
182.30
49.58
Fixed
-
80.90
22.90
22.12
14.00
0.19
4.50
26.81
33.14
WLL
-
62.93
11.94
3.19
16.61
4.43
25.50
33.12
52.63
GSM
-
223.84
29.50
22.39
30.00
29.98
70.00
122.37
54.67
MTNL
17.15
27.56
5.49
2.38
3.50
-1.48
5.00
5.90
21.41
Fixed
-
15.99
2.13
1.20
-
-2.66
-
-
-
WLL
-
0.00
1.49
0.27
-
0.50
-
-
-
GSM
-
11.57
1.87
0.91
-
0.68
-
-
-
Private
-
255.00
0.00
46.40
0.00
186.11
27.56
260.07
101.99
Fixed
-
-
-
0.00
-
-
15.99
15.99
-
WLL
-
-
-
7.14
-
82.10
0.00
89.24
-
GSM
-
-
-
39.26
-
104.01
11.57
154.84
-
Tax
25.09
-
11.47
10.61
11.08
11.08
12.66
34.35
-
BSNL
23.05
-
10.05
10.11
10.58
10.58
10.58
31.27
-
MTNL
2.04
-
1.42
0.50
0.50
0.50
2.08
3.08
-
Microwave
87.35
-
5.00
8.08
2.00
2.00
2.00
12.08
-
Optical Fib
273.83
-
125.06
87.55
55.00
55.00
38.00
180.55
-
BSNL
-
-
76.06
75.81
35.00
35.00
18.00
128.81
-
MTNL
-
-
49.00
11.74
20.00
20.00
20.00
51.74
-
VPT
218860
18000.00
3944.00
3693.00
7130.00
2960.00
8060.00
14713.00
-
Mid Term Appraisal of Tenth Plan (2002-07)

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

Name

Location

Nature of Project

Amount proposed to be invested

Present status

Ericsson

Jaipur

Telecom manufacturing

$ 50 million (already invested)

Inaugurated on 11.3.05. Unit in operation

Ericsson

Chennai

R&D facility,  Global Service Delivery Centre and facility for manufacturing GSM Base Stations and Mobile Switching equipment

$ 100 million in first phase

Announced the project at Jaipur on 11.3.05 and inaugurated on 25.02.2006.  Unit in operation

Ericsson

Other than Tamil Nadu

-do-

$ 100 million in first phase (within 2 – 3 years) Announced on 11.03.05. Under implementation.

Elcoteq

Bangalore

Telecom manufacturing

$ 100 million out of which $ 18 million already invested. 

Inaugurated on 11.04.05. Unit in operation

LG

Pune

Telecom manufacturing

$ 12 million

Unit in operation

Nokia

Chennai

Mobile handset manufacturing

$ 200 million (with 10,000 employees)

Announced on 06.04.05.  Inaugurated on 11.03.06. Unit in operation

Nokia

Chennai

To set up Global Network Operation Centre for Customers in Asia Pacific Region, Europe, Middle East and Africa

Announced on 16.12.05.  Inaugurated on 11.03.06. Unit in operation

Alcatel

Chennai

WiMax Centre etc.

$ 60 million

Inaugurated on 03.09.05. Unit in operation

Alcatel

Mankapur, U.P.

Technology transfer / revival of ITI

$ 10 million

Manufacturing recommenced on 07.07.05. Unit in operation

Alcatel

Rae Bareli, U.P.

Technology transfer / revival of ITI

$ 10 million

Manufacturing recommenced on 09.11.05. Unit in operation

Samsung

Manesar, Gurgaon, Haryana

Handset manufacturing

$ 15 million.  Expansion Plan of $200 million during the next 3 years.

Factory inaugurated on 07.03.06 Unit in operation

EMC2

Bangalore

Storage Technology Software Development

$ 250 million (first phase in 5 years)

Announed on 25.02.05. Unit in operation

Siemens

Chennai/ Hyderabad/ Kolkata

Telecom equipment manufacturing

$ 100 Million

Announced on 09.08.05.

Aspcomomp

Chennai

Hardware manufacturing

$ 70 million

Under implementation.

Flextronics

Chennai

Telecom Hardware manufacturing

$ 100 Million

Announced on 14.09.05. Under implementation.

CISCO

Chennai

NGN Lab at Chennai; e-Governance Networking in IT & Telecom across the nation

$ 1.1 Billion including  $ 10 million at Chennai. Investment in IT and Telecom sector across the nation.

Announced on 19.10.05. Under implementation.

SemIndia with AMD

 

Public Private partnership for Advanced Semiconductor Manufacturing with technology and equity from AMD

$ 3 billion (Rs.13,500 crores)

Announced on 30.11.05. MOU signed with Andhra Pradesh Government.

Intel Corporation

Bangalore / other areas to be identified

Research and Development centre at Bangalore, Marketing, Education and Community programmes (US $ 800 million)

$ 1.06 billion (in 5 years) [This will be in addition to the current investment of $ 700 million]

Announced on 05.12.05. Under implementation

Intel Corporation

Bangalore

Intel Capital Fund for investment in Indian Technology companies

$ 250 million (Out of $ 1.06 billion)

Launched on 05.12.05

Intel Corporation

Mumbai

Dedication of Intel's first 'Made in India' platform for notebooks "Napa"

---

Launched on 10.01.06

Microsoft Corporation

  R&D, Education, Governance and Productivity

$ 1.7 billion (in 4 years)

Announced on 07.12.05. Under implementation.

Microsoft Corporation

 

Windows XP Starter Edition Multilingual Version

 

Launched on 01.03.06.

Tessolve Services Pvt. Ltd.

Hyderabad

ATMP facility in Fab City

$ 200 million

Announced on 27.02.06. Under implementation.

HonHai (FoxConn) Precision Industry Co. Ltd.

Chennai

Manufacturing of mobile handsets and components and Electronic Hardware and related Services

$ 110 million

MoU to be signed

Xenitis Infotech Pvt. Ltd.

Hooghly, West Bengal

Inauguration of the factory for manufacture of Sub-10000 Computers

 

Inaugurated on 05.08.05. Unit in operation

Motorola

Chennai

Manufacturing of Motorola's first "Made in India" low cost GSM Phone

$ 70 million

Released in Delhi on 22.12.05 Unit in operation

AMD

New Delhi

Launch of low cost Computer

 

Launched on 13.10.05

 

 

TOTAL (including other cases)

$ 10.30 billion (about  Rs.45,000 crores)

Top


Andimuthu Raja was elected as member to the 11th Lok Sabha on DMK's ticket for the first time in the year 1996. He has also held earlier the positions in the federal government as Minister of State of Rural Development and Minister of State of Health and Family Welfare.


Next: Challenges call for focused efforts

Updated on May 29, 2007


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