Saturday, November 12, 2011

Changing Trends in India - Growth of Telecom

The past decade has been instrumental in refashioning the perception of India as a country on the global map. There are many reasons for the same and the growth of Telecom industry is one of the most important one.

With tremendous growth in the last few years, India has come to be regarded as the world's most competitive and one of the fastest growing telecom market. Competition has caused prices to drop and calls across India are one of the cheapest in the world. This has led to a huge impact on the outlook of the society.

In September 2004, the number of mobile phone connections crossed the number of fixed-line connections and presently dwarfs the wireline segment by a ratio of around 20:1. The mobile subscriber base has grown by a factor of over a hundred and thirty, from 5 million subscribers in 2001 to over 851 million subscribers as of June 2011 making it the world's second-largest country in terms of mobile phone users. It is also the world's third-largest country in terms of Internet users with over 100 million of them as of December 2010.

The total revenue in the telecom service sector was Rs. 71,674 Cr in 2004-2005 which is expected to be over Rs 2,00,000 Cr in 2011-2012. A teledensity of 84% of the population is also being targetted by 2012. Himachal Pradesh has become the first and only state in India to achieve 100 per cent tele-density. The state has almost seven million mobile customers.


Although, the growth in Mobile telephony has been stupendous in India over past 5-6 years, same cannot be said about broadband. The growth in broadband subscribers has been at snail’s pace. Mobile telephony spread across length and breadth of India, thanks to cheap handsets and even cheaper call rates. Unfortunately, broadband could not reach the masses due to higher prices, lower speeds, infrastructural issues among other reasons.

Hence even though India has the world's third-largest Internet users, the internet penetration is one of the lowest in the world at 8.4% of the population. The penetration of broadband connectivity is much worse. 60-70% of the people use Internet via moble phones.

This limitation had a major contribution in changing the perception of mobile phones. Many big players in the telcom industry have forayed into mCommerce in hope to capture this huge potential market.
The change in the perception and usage of mobile phones has been explained here in the continued post.

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