The Party Has Just Begun...

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Thirteen years back, when Jyoti Basu, the then chief minister of West Bengal, made the first mobile call from Calcutta (Now Kolkata) to the then union communications minister, Sukhram, in Delhi, no one could have imagined that India would have 250 mn mobile subscribers by 2008. Since the times when mobile phones were huge in size and cost-some would cost as much as Rs 45,000-and call rates were as high as Rs 16.5 per minute, not to mention that even for receiving calls one had to pay, India has completed a successful and unimaginable journey.

At that time, the cell phone was a status symbol. Now, it is possible for the common man to own a mobile phone; the cell phone has, in fact, become a necessity and will soon become as basic a need as food, shelter, and clothing. Making a call has become very cheap now; cell phones can be purchased for less than Rs 1,000, and recharge coupons of Rs 10 are available in general stores. This kind of transition in the telecom industry definitely calls for celebration.

The telecom revolution in India is considered to have a greater impact on the society than any other revolution of our time, be it the green revolution or the white revolution. And the telecom revolution is still taking place, and there are enough reasons to affirm that mobile penetration will exceed 500 mn subscribers by 2010.

The target of reaching the 250 mn mark in telephone connections, including both fixed and mobile, has been achieved by India, the world's fastest growing wireless market, two months prior to scheduled-December 2007.

A Boon in Disguise
The Indian mobile success story is quite dramatic. When the first mobile came to India, the industry accused itself of being a late starter. But analyzing closely, it was a boon in disguise. India embraced cellular technology when 2G systems were already in place in most foreign countries, and thus bypassed 1G technologies, thereby gaining access to a superior technology like 2G. And India did not have to try this technology as most of the lessons learnt by the European deployments could be transferred to India. India embraced GSM nearly eight years after it was taken up in Europe. Most of the equipment had already become very cheap by then. This allowed for mass deployment in the country. Moreover, India has visionaries like Sunil Bharti Mittal and Dhirubhai Ambani who embraced certain bold strategies. For example, Bharti Airtel has outsourced its complete network deployment to Ericsson, and management of networks to IBM, thus, asking experts to do the job. This outsourcing of its functions has helped the company to offer quality services to its consumers.

The teledensity has got a fillip from increasing wireless phones across the country. The money coming from companies that outsource services to India has made a difference by making items like the mobile phone affordable to Indians. The liberal economic policies of the Indian government and the financial restructuring have also raised the level of average disposable income.

Competition driven by regulatory initiatives, technological advancements, and policy initiatives continue to push the growth to new levels. This trend was more visible in mobile and long distance services. The competitive pressure has also made service providers more innovative in their tariff offerings.

Indian consumers have benefited immensely from lower tariffs, which have also been a major factor for explosive growth in the sector. Considering intense competition in various segments of the telecommunications sector and a continuous decline in tariffs, TRAI has gradually moved to a regime of tariff deregulation.

Concerns Remain
While we are all set to celebrate the mobile revolution in India, there still remain other concerns like the low Internet and broadband penetration. Though we have surpassed the 300 mn mark in overall telephone connections, broadband penetration is as low as 3 mn and the growth rate is not very encouraging. Most indicators of technology penetrations, such as telephone, PC, mobile, broadband, have a direct correlation with the increase in GDP and per capita of a nation. However, India's broadband penetration seems to be extremely low.

Hopefully, broadband penetration will increase in the next few years and will catch like a wildfire when suddenly the cost of adoption and network deployment and maintenance will turn out to be extremely low. Indian telecom operators usually wake up quite early to realize the potential of the Indian market. They will definitely gear up for this upcoming broadband revolution.
However, will Indian entrepreneurs, telecom vendors, VCs, and startups wake up to this? When the Indian mobile revolution happened, foreign telecom vendors benefited. They supplied the radio access network equipment and the core network equipment. They also supplied mobile handsets and PDAs. Indian telecom operators had no choice but buy equipment from these foreign players.

Operators like BSNL, Airtel, and Reliance throw open tenders worth billions of dollars, and foreign companies take up most of these monies. Almost no Indian company seems to wake up to capture some of this market share. We could give ourselves an excuse that the Indian ecosystem was not conducive to create such suppliers in India. We didn't really anticipate or predict the oncoming mobile revolution to benefit from it. But, will we give ourselves the same excuse for missing the broadband revolution, or will we do something about it?

Outlook 2010
The commercialization of cellular mobile telecommunication services began in late seventies; Japan took the lead in 1979. Many developed countries have reached a saturation point only now, though developing countries still have to reach saturation. Similarly, the market for the Internet in developing countries is yet to mature though the service commenced in the late 1960s; the US took the lead in 1969. The true potential of the mobile phone, as an integrated communications, entertainment and positioning device, is only beginning to be realized.

If the past trends were any indication, it would be reasonable to hope that by 2010, India would complete its transition into digital switching and transmission, VoIP, broadband, and 3G.

Telecom will be the springboard of the future expansion of IT heralding into an information society. ICT will spread among the masses and will spur innovation, entrepreneurship, and growth. An expanding domestic market will deepen the synergy between the domestic and the export market and strengthen India's presence in the high-value segment of global trade and investment. ICT benefits will spread among all-the rich and the poor, the young and the old, the organized and the unorganized, and the government and the governed.

Gyana Ranjan Swain
gyanas@cybermedia.co.in

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