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Indian Telecom Sector – 929 million subscribers isn’t the number pretty shocking

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Indian Telecom Industry

929 million – the number of subscribers, the Indian telecom sector has achieved to become one of the major indicators of and contributors to the economic growth of India. Indian telecom sector is one of the fastest growing telecom sectors in the world, with over 16 million subscribers being added every month.

The recent technology like Mobile Number Portability and auction of 3G spectrum gave a new impetus for growth in the sector. However if we talk about the current status of the sector, we see that in recent times, the sector has hogged limelight and media attention for all the wrong reasons.

Power of compounding was actually seen in the sector, when one actually counted the number of zeros in the size of the scam that not only rocked the telecom sector but the entire Indian economy. Indian companies like Uninor (JV of Telenor and Unitech), Tata Teleservices, Idea and many others came into the limelight of using unfair means for the auction. But if we talk of the Indian telecom sector, keeping aside the scams, we can very well see that the Indian Telecom sector witnessed tremendous growth. Probably, one of the biggest growths of all time the sector ever experienced.

Read about the Mobile Phone Companies in India.

Reasons for the growth of Indian Telecom Sector

The growth of the sector can very well be attributed to the facts like:

  • Advances in technology
  • Regulatory reforms
  • Policy changes and
  • Dynamics of the private sector in fiercely competitive environment.

Concerns of the Telecom Sector in India

1) Digital Divide – Recent years have seen many changes in the telecom sector; specially from the point of customers. Customers are blessed with one of the lowest mobile tariffs in the world. Scheme like one paise per second etc was rolled out by the telecom companies to invite huge number of consumers so as to build consumer base and boost revenue. Exponential growth in the sector undoubtedly gave a new energy to the economy but unfortunately the Telecom Sector has failed to bridge the digital divide.

2) Rural Tele-density – Talking about the rural India which has the maximum of its population concentrated we see, rural tele-density to be very low even till today and about 40% of the country has either no or poor wireless coverage.

3) Internet Usage – Despite the fact that the number of internet users in the economy has increased manifold over the years, still the broadband penetration is equally inadequate adding to the woes. It was a decade back in 1999 when the government formulated the New Telecom Policy that triggered the growth of the sector to huge extent. But again the sustainability of that policy is achieved and it’s time for the government to formulate new policies to change the state of Telecom industry, so as to ensure that the rural tele-density is maximized and broadband connection and other facilities like Wi-Fi, Wi-max, 3G, 4G is executed in major parts of the Indian Territory.

4) Spectrum – Also it needs to ensure that the spectrum which is a natural asset for the economy should be prevented from being exploited as done in the past, by the caretakers to fill their own pockets instead of utilizing the revenue generated for the growth of the nation. In the case of 2G scam defaulters were punished and beneficiaries were penalized, but still a lot remains to be done so as to ensure that any such act could be prevented in the future.

Read about List of Telecom Companies in India.

Some of the major telecom companies operating in the Indian Territory are as follows:

  • Bharti Airtel
  • Vodafone (Formed by the Hutchison Essar buyout by Vodafone Group)
  • Reliance Communications (a ADAG group company)
  • Uninor (Telenor+Unitech)
  • Idea (Aditya Birla Group)
  • Aircel.

Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

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