The Indian wireless revolution!

(Last Updated On: November 9, 2006)

The Secretary of Telecom, Shri Mathur, heading the Indian delegation to the ITU Plenipotentiary Conference in Turkey, addressed the other delegates at the conference and said that India was the five largest telephone networks in the world. It has more than 170 million telephones and taking efforts to provide telephone connectivity all over India. He said that the telecom sector has received national recognition as the key driver for development and growth and India is presently adding more than 6 million telephones connections per month, which is the largest growth in the world.

Regional telcos such as SingTel, operating in India has announced that its net profit rose in the second quarter after record subscriber growth at its Indian affiliate, Bharti Telecom. Analysts in the region feels that cellphone penetration in India will continue to double if not triple over the next 2 years. Meanwhile, Swedish telecom equipment player Ericsson told Reuters two days ago, that it had emerged as the lowest bidder for a multi-billion dollar GSM line contract offered by Bharat Sanchar Nigam Ltd., India’s No. 3 mobile services firm. According to Reuters, India, Asia’s fourth-largest economy, is witnessing a mobile revolution with local mobile calls of as low as 2 U.S. cents a minute in September luring 5.9 million new users to a 123.44 million-strong-market.The contract is the second-straight major coup for Ericsson in the world’s fastest growing wireless services market after it recently announced a $1 billion order from top mobile services provider, Bharti Airtel Ltd.

India’s regulatory body TRAI (Telecommunications Regulatory Agency of India) is rapidly reviewing policy and regulation to make India a more vibrant market. Oddly though, some regulatory powers still lie in the government incumbent (the former DOT). In any case, last year, the Indian government approved a rise in the foreign investment limit in telecoms services firms to 74 percent from 49 percent. AT&T which had been operating in India in collaboration with VSNL, is now reported to have tied up with Mahindra Telecommunications Investment Private Ltd. to set up a joint venture — AT&T Global Network Services India Private Ltd. — in which AT&T will own a 74 percent stake. The joint venture is expected to start operations early next year, targeting large domestic and overseas corporate houses in India for services like virtual private network solutions that help transmission of data over the Internet.

Other exciting developments in India include Alcatel opening up in association with Centre for Development of Telematics (C-DOT), the Indian Government’s telecom technology development centre, a ‘WiMAX reality centre’ in Chennai. This is reportedly the first lab of its scale entirely dedicated to WiMAX IEEE 802.16e-2005 technology in India. Wireless Innovation Platform Labs (WIP) of Denmark in association with Danish telecom companies and the Danish government, with the participation of Aalborg University, will be setting up a 4G R&D centre in Kolkatta. Cisco Systems is expanding its centre in Bangalore. Intel is awaiting Indian government policies before revealing plans to manufacture in India, and meanwhile is reported to have spent more than $1 billion in India to strengthen its research and development and to invest in telecoms start-ups. Meanwhile, VC monies are also streaming into India. Norwest Venture Partners (NVP), a global venture capital firm managing $2.5 billion in venture capital, is setting up shop in India. The Managing Director of Norwest was reported as saying “Broadband adoption in India has been showing signs of explosive growth since mid-2005, and according to various research, it is growing at a rate of 30 per cent a quarter. This is one of the crucial barometer for the Web 2.0 to deliver results and we as VCs are upbeat on this.”