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Telecommunications

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Telecommunication

September, 2012

Introduction

Since the introduction of the New Telecom Policy in 1999, Indian telecom industry has witnessed exponential growth, especially in the wireless segment. The industry has evolved as a basic infrastructure on the similar lines of electricity, roads, water etc.

The overall tele-density has increased from 4.3 in March 2002 to 78.1 in February 2012, wherein the rural areas registered an increase from 1.2 in March 2002 to 38.5 in February 2012, according to a report titled ‘Telecom Sector in India: A Decadal Profile’ prepared by the Telecom Regulatory Authority of India (TRAI). Also, the share of telecommunication services (excluding postal and miscellaneous services), as a per cent of the total gross domestic product (GDP), has increased from 0.96 in 2000-01 to 3.78 in 2009 -10. The Government has given estimates that every 10 per cent increase in access of broadband connectivity boosts the GDP by 1.38 per cent. International comparisons (among 222 countries) in the same report show that India has the second largest number of telephone subscribers in the world accounting for 12 per cent of the world’s total telephone subscribers.

Key Statistics

  • The telecom subscriber base stood at 944.81 million in July 2012, according to data released by TRAI.
  • Another report by CAG has revealed that telecom users in rural India have increased at a faster pace as against urban users. Moreover, the capital investment in the sector increased from Rs 2,40,711 crore (US$ 43.63 billion) in 2006-07 to Rs 4,79,278 crore (US$ 86.88 billion) in 2010-11, while the capital employed grew to Rs 3,37,683 crore (US$ 61.2 billion) from Rs 1,98,011 crore (US$ 36 billion) in the same period, indicating a tremendous growth in investment in the telecom sector.
  • Furthermore, mobile data traffic in India has increased by 54 per cent between December 2011 and June 2012, according to a report by Nokia Siemens Networks. The statistics reveal that data traffic generated by 3G services has increased by 78 per cent while that of 2G services has increased by 47 per cent during the period. While 2G users in India are consuming three-fourth of the total mobile data traffic on average, 3G users consume four times more data than 2G users. Considering such a tremendous growth, Nokia Siemens Networks expects the country’s mobile data consumption to double by June 2013.
  • Owing to ‘banking-on-the-go’ initiatives taken by banks such as SBI and ICICI, the value of mobile banking transactions increased five-fold to Rs 1,140.6 crore (US$ 206.75 million) between January and May 2012 as against the same period a year ago. Service providers like Airtel have promoted mobiles as medium for bill payments and fund transfers in a big way, due to which the volume of transactions also rose significantly (from 0.5 crore in January-May 2011 to 1.5 crore mobile transactions in January-Many 2012).