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In the past five years, telecom service providers in India have added three times more subscribers than in the first 53 years of post-independence existence. Owing to its rapid development, the telecom industry has truly emerged as the poster child of Indian economic reforms.

A major contributor towards the growth of the telecom industry in India is the Association of Unified Telecom Service Providers of India (AUSPI). It represents the interests of the CDMA wireless and fixed-line operators in India. Owing to the new leadership of our core members, with Ratan Tata having assumed the chairmanship of Tata Teleservices and Anil Ambani the chairmanship of Reliance Infocomm in recent months, the industry has registered tremendous growth.

Mukund G Rajan, president, Association of Unified Telecom Service Providers of India (AUSPI)

Our compound annual growth rate has been in excess of 200% since the launch of our services. The figure is impressive when compared to the rest of the cellular industry, which has been growing at around 70%. Our subscriber base has crossed 30 mn, and our members have been regularly adding over a million subscribers each month. Our reach now extends to the largest number of towns and villages amongst the private operators. With some of the most customer-friendly and affordable tariffs in the Indian market, we are aggressively leading the thrust into rural India.

In the last round of bids announced by the Universal Service Obligation (USO) fund administrator, our members were the only private operators to win the right to offer rural services in as many as 103 secondary switching areas (SSAs) covering 40% of rural India.

Our members provide some of the most innovative and creative solutions in the Indian telecom sector. To cite an example, the fixed wireless phones propagated by our members have transformed basic communication in India. By providing many more value-adding features, including Internet connectivity and SMS, our members have gone much beyond the services provided by traditional telcos. In fact, one of our members received the prestigious World Communications Award 2005 under the category “Best Telecom Service in Emerging Markets” as an acknowledgement of this constant innovation.  We are also leading the sector in providing the killer application in rural India, which is data connectivity for access to government services and critical information.

With the largest customer-facing presence, including exclusive outlets and huge numbers of feet-on-street and world-class back-end capabilities, our members are now poised to dominate the Indian telecom landscape. This includes state-of-the-art network operations centres and the largest call centres in India.

Reshaping the Telecom Industry
By virtue of their performance in India, the AUSPI members are also helping to shape the future of CDMA technology evolution. We believe India can and ought to take a leadership role in defining the future evolution of CDMA. We already have membership of the various CDMA standards bodies, including the CDMA Development Group (CDG).

Equally important, we have led in India the reduction in handset prices to deliver in the Indian market the world's most affordable CDMA devices. Our ability to do this in the area of data-enabled handsets and devices is playing a key role in supporting the government's vision of providing data-rich information services to the rural parts of India.

We are sure we will receive the government's support, as has the IT industry, in our endeavour to lead further technology evolution in the CDMA industry, including in the areas of 3G technologies such as EV-DO, and other wireless broadband technologies.

Challenges Before AUSPI
The Indian telecom industry has come a long way since its inception. It is widely recognized that the industry in India has attracted some of the savviest, smartest business persons. I often say that if one can succeed in telecom in India, one can succeed in any business. The Indian telecom sector has seen some of the toughest Indian and multinational competition, and relatively complex regulation. Moreover, as a rapidly changing technology, it can turn yesterday's powerful companies into today's losers rendering billions of dollars of investment worthless.

The reduction in handset prices is playing a key role in supporting the government's vision of providing data-rich information services to the rural parts of India

Like the IT industry, the Indian telecom industry is attracting many of the brightest young minds in India. The average age of employees in the Indian telecom sector is in the early 30s. It lies in the hands of this community of young and bright minds to shape India's future, to create in a country where around 50% of the population is below the age of 25 years a future in which every Indian adult is networked and connected, so that India emerges as the premier knowledge society in the world.

Yet, on our path to achieve these objectives lie several challenges.

The availability of raw material or spectrum: Without this, wireless communication is impossible. We need more spectrum, and this should be released as soon as possible, as part of a well-defined spectrum policy. Critically, spectrum should be equally allocated to all service providers, and service providers must be free to adopt whichever technology they please, with all the attendant risks, of course. In this connection, it is imperative that the significantly large and complicated allocations to the defense services are coordinated and generous allocations are released to the service providers, who today are struggling with some of the lowest allocations of spectrum in the world.

The management of policy and regulation: It will always be the case that technology development will outpace developments in policy and regulation. Rather than penalizing those in the forefront of innovation, the licensor and regulator need to be supportive of innovation and encourage the delivery of new services and technologies to subscribers. We need a fair, stable and predictable policy regime, and sensible regulation. The benefits of this have already been demonstrated in the IT sector in India. One would hope, given that the cabinet minister in charge of IT also presides over the telecom industry, that the same philosophy that has allowed IT to bloom in India will increasingly permeate the telecom space.

The creation of a level playing field: We must ensure that the same yardsticks and rules apply to all players, and they are put to common tests. This means we must have a system where the private players receive the same incentives and support that the powerful and profitable incumbents controlled by the government receive. And where such fundamental rights as the right to interconnection are not delayed or altogether denied for inadequate reasons.

 Taxes and levies: India has one of the highest tax-paying telecom sectors in the world. Combined with the lowest tariffs in the world, it leaves one with wafer-thin margins for service providers. A calculation shows that our taxes and levies at between 19-28% of revenues plus GST are far higher than other emerging markets, including Sri Lanka, Pakistan, and China. To provide incentives to increase penetration in low teledensity areas, it is imperative that these levies be reduced. This is particularly necessary in rural areas which have lesser purchasing power and low density of population, and therefore higher network costs. Such a measure will certainly provide the Indian economy with a sustainable competitive advantage vis-à-vis other emerging markets.

All of these challenges can and will be overcome, with typical Indian ingenuity. But the sooner we do so, the quicker India can emerge as a trendsetter in the world of telecom. With 4-5 mn subscribers being added each month, the Indian market is rapidly becoming the most creative telecom market in the world. The future, as I can foresee, is hugely exciting.

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