The Indian telecommunications has been zooming up the growth curve at a feverish pace, emerging as one of the key sectors responsible for India's resurgent economic growth. India is set to surpass US to become the second largest wireless network in the world with a subscriber base of over 300 million by April, according to the the Telecom Regulatory Authority of India (Trai). The month of April 2008 will see India’ wireless subscriber base that currently stands at 250.93 million surpassing that of the US to become the second wireless network in the world.

The year 2007 saw India achieving significant distinctions: having the world's lowest call rates (2-3 US cents), the fastest growth in the number of subscribers (15.31 million in 4 months), the fastest sale of million mobile phones (in a week), the world's cheapest mobile handset (US$ 17.2) and the world's most affordable colour phone (US$ 27.42) and largest sale of mobile handsets (in the third quarter).

Segment-wise growth

Wireless segment has emerged as the preferred mode of telephone service by the consumers, reflected in the rising share of mobile phone connections to total connections. The share of mobile phones has increased from 71.69 per cent at the end of March 2006 to 86.07 per cent at the end of January 2008. While total mobile subscriber base was 242.4 million, wire line subscriber base was 39.22 million.

In fact, since 1999, mobile subscriber base has been growing at a CAGR of around 85 per cent. And, while about 8 million new subscribers are being added every month in mobile segment, there has been a decline in the total number of wire line subscribers. Also, the net addition of 8.77 million subscribers added in January 2008 has been the highest ever increase in a single month.

Also, private sector has become the dominant player in the industry. While public sector companies added 53.6 million subscribers during 1998-2007, private companies have added a whopping 133.58 million subscribers during the same period. The dominance has been much more pronounced in the mobile market, where private operators have added 124.68 million subscribers, while public sector operators added only 31.79 million subscribers.

Investment

The booming domestic telecom market has been attracting accelerating amount of investment. In fact, the surge in mobile services market is likely to see investment worth about US$ 24 billion by 2010, going by industry estimates owing to the growing number of mobile subscribers which is estimated to increase to 60 billion by 2012, according to Standard Chartered Bank, implying a mobile in the hands of every second person in the country.

The cumulative FDI inflows from April 2000 to December 2007 have been US$ 3.62 billion, accounting for 7.99 per cent of the total FDI inflows into the country. In fact, the surge in mobile services market is likely to see investment worth about US$ 24 billion by 2010, going by industry estimates. This is understandable, when seen that the number of mobile subscribers is estimated to increase to 60 billion by 2012, according to Standard Chartered Bank, implying a mobile in the hands of every second person in the country.