Very interesting, but if true, the country must once again salute the torch
bearers of telecom liberalization. A new research report, India: The Impact of
Mobile Phones, claims that increased penetration of mobile phones has led to
higher and more inclusive economic growth. The report done by Indian Council for
Research on International Economic Relations, (ICRIER) says states with 10%
higher mobile phone penetration than others have grown 1.2% faster. India is
beginning to arrive.
When telecom was thrown open to new technologies and private players in 1994,
not only was India a non-entity as an economic power, but its teledensity was
also abysmally low. Within 14 years, we have seen a clear transformation on both
fronts. India is making a big mark as a growing economic power and has at
present one of the fastest growing teledensity in the world. Are the two
connected? Not sure, but empowerment and economic growth surely are.
Those surveyed said that though they had to spend a big chunk of their income
to acquire a mobile phone and get connected, but once connected, two in three
users said that their travel expenses had decreased. More than 50% said it took
them less time to do their work such as buy materials and provide service to
their clients.
The report needs a closer study but some of the messages coming out do
indicate a clear relationship between teledensity and economic growth. For
example, income of households in poor urban areas (1,174 households in slums of
Delhi, Kolkata and Ahmedabad) that owned a mobile phone for two years was at Rs
7,289 per month, at least one-quarter more than for houses that owned a phone
for one year.
Having said all this, it might still not be the time to sit down and relax.
Countries such as China, Sri Lanka, Pakistan, Brazil, the Philippines, and
Bangladesh which are aspiring for global business for various types of product
exports and BPO services, are also growing equally faster on the telecom front.
The pressure is therefore back on the Indian government and industry to ensure
faster policy decisions and network roll-outs, and quality services. Several
recent service quality reports including one done by Voice&Data and another by
Trai, do not put most Indian operators in good light. Business and economic
growth will depend on mobile penetration only to a point-beyond that quality of
service will be the driver.
It is good to see that industry watchers have now begun to track the end
results rather than just telephone numbers. Policy makers should therefore also
shift focus and instead of patting themselves on the back for industry growth,
should work toward making telecom a growth tool for the downtrodden. Believe me,
the industry will also benefit from this. Some quick action will therefore will
be required on spectrum allocation policy, the universal service obligation
performance, and further reducing handset costs.
Ibrahim Ahmad
ibrahima@cybermedia.co.in
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