Telecom Sector in India

POSITION PAPER ON

THE TELECOM SECTOR

IN INDIA

December 2009

Department of Economic Affairs Ministry of Finance Government of India

Telecom Position Paper

EXISTING SCENARIO 1 Indian telecom industry continued to register significant growth in 2008-09. Indian telecom network with about 414 million connections in February 2009, is the third largest in the world, while it is credited with the second largest wireless network in the world (see below section on Mobile Telephony for details). At the current pace, the target of 500 million connections by 2010 is well within reach. The Government of India has reiterated its commitment to reach out to remote and uncovered areas and to augment broadband facilities in rural areas. 2 The total number of telephone increased from 76.53 million by end-March 2004 to 413.85 million by end-February 2009. About 113.36 million telephones, at the rate of more than 14 million subscribers every month were added during 11 months of 2008-09. The total tele-density increased from 12.7% in March 2008 to 35.65 per cent in February 2009. While rural tele-density reached 13.81 % in January 2009, the urban tele-density shot up to 83.66 %.

Table 1: Growth of Telephones over the years March 06 Fixed Lines CDMA GSM Wireless (CDMA & GSM) Gross Total Annual (%) Growth 40.23 32.67 69.19 101.86 142.09 44 March 07 40.77 44.62 120.47 165.09 205.86 45 March 08 39.41 68.38 192.70 261.08 300.49 46 Feb 09 37.73 92.14 283.98 376.12 413.85 37.72

Source: Economic Survey 2008-09

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Telecom Position Paper MOBILE TELEPHONY 3 India is among the fastest growing mobile markets in the world: India, the second largest mobile market in the world, is also among the fastest growing mobile markets globally. The total number of mobile subscribers in India (i.e., the subscriber base) has increased from 6.4 million in March 2002 to around 350 million in December 2008, at a compounded annual growth rate (CAGR) of 81%, aided by a significant...