Indian delays may hit telecoms growth
Monday, 18 June 2007
Amy Yee from New Delhi
India is within reach of ambitious targets of signing up 500m phone subscribers by 2010, or nearly half its population, but delays in adding more spectrum could stifle near-term growth, according to the country's telecoms industry regulator.
India's much-awaited policy on spectrum - or radio frequency - could take another eight to 10 months to finalise, Mr Nripendra Misra, chairman of the Telecom Regulatory Authority of India (Trai) told the Financial Times.
More spectrum is required to support an extra 5.0m-7.0m new mobile subscribers each month. India overtook China as the world's fastest-growing mobile phone market late last year. It claimed 212m phone subscribers at the end of April, most of whom are mobile users. Telephone penetration has jumped to 18 per cent from 2.0 per cent before India's telecoms industry reforms began in 1999.
Trai submitted its recommendations for a new spectrum policy last September. But the process has been slowed by the need for clearances from government bodies, including the Department of Telecommunications and India's defence department. Most of India's spectrum is reserved for defence purposes.
Indian telecoms operators urgently need more spectrum to support not just the growing number of conventional voice calls, but also broadband and imminent high-speed "3G" data services such as video and internet.
Until more spectrum is released, India's overburdened telecoms networks will suffer from dropped calls and bad connections.
"Without spectrum, Indian telecom will stop growing at its full potential," said Kunal Bajaj of BDA, the telecoms consultancy based in New Delhi.
Nevertheless, Mr Misra expects WiMax technology in India to become standard in the next three to six months. Many in the telecoms industry are placing bets on WiMax - long-range radio network technology - to spur broadband by making cables unnecessary for the last 100 metres to a home.
The telecoms industry has pinned high hopes on broadband in villages to spread education, entertainment, medical services and "e-governance", or the digitisation of government records such as land records and birth certificates, which are essential to access basic services in India.
But broadband connections have yet to take off outside India's cities. "It's a very big challenge. The divide is so strong," said Mr Misra.
The country claimed a total of 2.4m broadband connections in April, compared with targets of 5.0m now and 10m by 2010. But more spectrum and new technology such as WiMax could boost the number of broadband connections, said Mr Misra.
Broadband has not spread more widely because the number of computers in India remains low at roughly 10m.
Another hurdle to broadband growth is a dearth of computer applications relevant to rural dwellers. "Unless you can relate the economic benefit to farmers, they won't invest in it," said Mr Misra.
While some applications for e-governance, e-medicine and e-education are being developed locally, the challenge to growth is time. "Are you going to do it in six months or six years?" he asked. For computers to be affordable to rural dwellers who comprise nearly 70 per cent of India's 1.1bn population, prices would have to fall to Rs5,000-Rs7,000 from about Rs20,000 ($486, euro363, £247), Mr Misra said.
Under syndication arrangement with FE
India is within reach of ambitious targets of signing up 500m phone subscribers by 2010, or nearly half its population, but delays in adding more spectrum could stifle near-term growth, according to the country's telecoms industry regulator.
India's much-awaited policy on spectrum - or radio frequency - could take another eight to 10 months to finalise, Mr Nripendra Misra, chairman of the Telecom Regulatory Authority of India (Trai) told the Financial Times.
More spectrum is required to support an extra 5.0m-7.0m new mobile subscribers each month. India overtook China as the world's fastest-growing mobile phone market late last year. It claimed 212m phone subscribers at the end of April, most of whom are mobile users. Telephone penetration has jumped to 18 per cent from 2.0 per cent before India's telecoms industry reforms began in 1999.
Trai submitted its recommendations for a new spectrum policy last September. But the process has been slowed by the need for clearances from government bodies, including the Department of Telecommunications and India's defence department. Most of India's spectrum is reserved for defence purposes.
Indian telecoms operators urgently need more spectrum to support not just the growing number of conventional voice calls, but also broadband and imminent high-speed "3G" data services such as video and internet.
Until more spectrum is released, India's overburdened telecoms networks will suffer from dropped calls and bad connections.
"Without spectrum, Indian telecom will stop growing at its full potential," said Kunal Bajaj of BDA, the telecoms consultancy based in New Delhi.
Nevertheless, Mr Misra expects WiMax technology in India to become standard in the next three to six months. Many in the telecoms industry are placing bets on WiMax - long-range radio network technology - to spur broadband by making cables unnecessary for the last 100 metres to a home.
The telecoms industry has pinned high hopes on broadband in villages to spread education, entertainment, medical services and "e-governance", or the digitisation of government records such as land records and birth certificates, which are essential to access basic services in India.
But broadband connections have yet to take off outside India's cities. "It's a very big challenge. The divide is so strong," said Mr Misra.
The country claimed a total of 2.4m broadband connections in April, compared with targets of 5.0m now and 10m by 2010. But more spectrum and new technology such as WiMax could boost the number of broadband connections, said Mr Misra.
Broadband has not spread more widely because the number of computers in India remains low at roughly 10m.
Another hurdle to broadband growth is a dearth of computer applications relevant to rural dwellers. "Unless you can relate the economic benefit to farmers, they won't invest in it," said Mr Misra.
While some applications for e-governance, e-medicine and e-education are being developed locally, the challenge to growth is time. "Are you going to do it in six months or six years?" he asked. For computers to be affordable to rural dwellers who comprise nearly 70 per cent of India's 1.1bn population, prices would have to fall to Rs5,000-Rs7,000 from about Rs20,000 ($486, euro363, £247), Mr Misra said.
Under syndication arrangement with FE