The Indian telecommunications Network with 250m telephone connections is the fifth largest in the world and is the second largest among the emerging economies of Asia. Today it is the fastest growing market in the world and represents unique opportunities for UK companies in the stagnant global scenario.
Tele-density, which was languishing at 2% in 1999, has shown an impressive jump to 9.5% in 2006 and 10.5% in 2007 and is set to increase to 20% in the next five years beating the Govt. target by three years. Accordingly, India requires incremental investments of USD 20-25 billion for the next five years.
Private operators have made mobile telephony the fastest growing (over 164% p.a.) in India. With more than 33 million users (both CDMA and GSM), wireless is the principal growth engine of the Indian telecom industry. Given the current growth trends, cellular connections in India will surpass fixed line by late 2004/early 2005. Intense competition between the four main private groups - Bharti, Vodafone, Tata and Reliance and with the State sector incumbents-BSNL and MTNL has brought about a significant drop in tariffs. There has been almost 74% in cell phone charges, 70% in ILD calls and 25% drop in NLD charges, resulting in a boom time for the consumers.
The Government has played a key enabling role by deregulating and liberalizing the industry, ushering in competition and paving the way for growth. While there were regulatory irregularities earlier, resulting in litigation, these have all been addressed now.
Customs duties on hardware and mobile handsets have been reduced from 14 percent to 5 percent. The Indian government has merged the IT and Telecom Ministries to speed up reforms and decision on the Communication Convergence Bill to enable the common regulation of the Internet, broadcasting and telecoms will be taken after the new Government assumes responsibilities in may this year. An