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With the aim to provide e-governance and data services to the rural masses, a
proposal is also under consideration of the Government to provide subsidy
support for Broadband connectivity in rural and remote areas of the country in a
phased manner by utilizing the infrastructure created for provision of mobile
services. The broad parameters under which the connectivity is required to be
provided are being worked out. The detailed scheme in this regard is being
prepared.
The project at a cost of Rs. 980 crore for release of 45 MHz. spectrum from other
user organization for growth of mobile services has been launched. This
additional spectrum is likely to be made available by June, 2007.
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Mobile Operators' Shared Tower (MOST)
The project for sharing of passive and active infrastructure and network operating
expenses by mobile operators has been launched in Delhi and Mumbai. It aims at
reducing the number of towers in the skyline of the city, optimal utilization of
resources and reduction in clearances from local agencies. The sharing of
infrastructure will be increased in urban areas from present 25% to 40% by 2007
and 70% by 2010.
Focus has been laid on localization and development of local content to help
bridge digital divide in development of tools and fonts in all major Indian
languages by 2007.
Rural Telephony: 90% of the villages have already been provided with Village
Public Telephones (VPT). Under Bharat Nirman, out of 66,822 uncovered
villages, 38,795 villages have been provided VPTs till December 2006.
Remaining villages will be provided with VPTs by November 2007.
With the passing of the Indian Telegraph (Amendment) Bill 2006, USO support
will be provided for the mobile services and Broadband connectivity in rural areas.
USO subsidy support scheme will be utilized for shares wireless infrastructure in
rural areas with about 8,000 towers by 2007 and 10,000 more by 2010. A target
has been set for reduction of urban-rural digital divide from present 25:1 to 5:1 by
year 2010. Support is being extended for rural household telephone connections
on landline and Fixed Wireless Terminals (FWTs) in 1685 Short Distance
Charging Areas (SDCAs) out of a total of 2647 SDCAs.
Broadband: The Year 2007 has been declared the year of broadband. The
broadband penetration has not increased as expected and at present 2 million
broadband connections have been provided, covering more than 600 towns.
Target has been set for 9 million broadband connections with maximum speed
upto 2 mbps by 2007 and 20 million connections by 2010 and providing
Broadband connectivity to all secondary and higher secondary schools, public
health institutions and panchayats by 2008.
In rural areas, connectivity of 512 KBPS with ADSL 2 plus technology (on wire)
will be provided from about 20,000 existing exchanges in rural areas having
optical fibre connectivity. Community Service Centres, secondary schools, banks,
health centres, Panchayats, police stations etc. can be provided with this
connectivity in the vicinity of above mentioned 20,000 exchanges in rural areas.
DoT will be subsidizing the infrastructure cost of Broadband network through
support from USO Fund to ensure that Broadband services are available to users
at affordable tariffs.
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Roll out of Broadband services in the remaining areas of the country will be done
on wireless media with a minimum speed of 512 KBPS. This coverage is
proposed to be extended before the end of 2007.
Growth of subscribers
The telecom sector has shown robust growth during the past few years. It has
also undergone a substantial change in terms of mobile versus fixed phones and
public versus private participation. The following table shows the growth of
telecom sector since 2002:
Subscribers’ base (in Million)
March’02 March’03 March’04 March’05 March’06 Dec.’06
Fixed lines 38.29 41.33 40.92 41.42 40.23 40.32
CDMA 0.25 0.61 9.46 15.92 32.67 44.17
GSM 6.43 12.69 26.15 41.03 69.19 105.42
Wireless
6.68 13.30 35.61 56.95 101.86 149.59
(CDMA&GSM)
Gross Total 44.97 54.63 76.53 98.37 142.09 189.91
Internet
3.23 3.64 4.55 5.55 7.05 8.6
subscribers
Broadband
- - - 0.18 1.32 2.03
subscribers
Thus, the number of telephones has increased from 44.97 million as on 31.03.02
to 142.09 million as on 31.03.06 and 190 million till December 2006 and 203
million by Feb. 2007. Wireless subscribers increased from 6.68 million as on
31.03.02 to 101.86 as on 31.03.06 and 149.6 million as on 31.12.06.
With the opening of telecom sector to the private operators, their share in the
number of subscribers has been steadily increasing which is evident from the
following table:
Number of Telephones (in million)
Year PSU PSU Total Private Private Total Grand %age
(March) Fixed Wireless PSU Fixed Wireless Private Total share
of
PSUs
2002 37.70 0.47 38.17 0.59 6.21 6.80 44.97 84.88
2003 40.02 3.16 43.18 1.31 10.14 11.45 54.63 79.04
2004 39.77 6.71 46.48 1.15 28.90 30.05 76.53 60.73
2005 39.87 12.21 42.08 1.55 44.74 46.29 88.37 47.62
2006 39.25 21.83 61.08 0.98 80.03 81.01 142.09 42.99
Dec.,’06 37.27 29.20 66.47 3.05 120.39 123.44 189.91 35.0
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The share of private sector in the number of telephones has increased from
15.12% (6.80 million telephones) in March 2002 to 65.0% (123.44 million
telephones) in December 2006.
The preference for use of wireless phones has also been predominant in the
sector. This is confirmed from the rising share of wireless phones, which
increased from 14.85% (6.68 million telephones) in March 2002 to 78.8% (149.59
million telephones) in December 2006. At present, the mobile subscriber
additions in India is more than 6 million mark, the highest in the world.
Trend in Tele-density
Tele density in the country has steadily increased from 4.29% as on 31.3.02 to
16.83% as on 31.12.2006. The rural telephony has not kept pace with the
impressive growth in urban connectivity.
Tariff Changes
The Indian Telecom Sector has witnessed major changes in the tariff structure.
The Telecommunication Tariff Order (TTO) 1999, issued by regulator (TRAI), had
begun the process of tariff balancing with a view to bring them closer to the costs.
This supplemented by Calling Party Pay (CPP), reduction in ADC and the
increased competition, has resulted in a dramatic fall in the tariffs.
The peak National Long Distance tariff for above 1000 Kms. in 2000
has come down from US$ 0.67 per minute to US$ 0.02 per minute in
2006.
The International Long Distance tariff from US$ 1.36 per minute in 2000
to US$ 0.16 per minute in 2004 for USA, Canada & UK.
The mobile tariff for local calls has reduced from US$0.36 per minute in
1999 to US$ 0.009 - US$ 0.04 per minute in 2006.
The Average Revenue Per User of mobile is between US$ 5.06 - US$
7.82 per month
Manufacture of Telecom Equipment
Rising demand for a wide range of telecom equipment, particularly in the area of
mobile telecommunication, has provided excellent opportunities to domestic and
foreign investors in the manufacturing sector. The last two years saw many
renowned telecom companies setting up their manufacturing base in India.
Ericsson has set up GSM Radio Base Station Manufacturing facility in Jaipur.
Elcoteq has set up handset manufacturing facilities in Bangalore. Nokia set up its
manufacturing plant in Chennai. LG Electronics set up plant of manufacturing
GSM mobile phones near Pune. Ericsson recently launched their R&D Centre in
Chennai. Flextronics has set up an SEZ in Chennai. Motorola is likely to go into
production in the first quarter of 2007. Other major companies like Foxconn,
Aspcom, Solectron etc have decided to set up their manufacturing bases in India.
The aim is for US$ 2 billion FDI in manufacturing, doubling the production in 2007
and quadrupling it in 2010. Target has been set for achieving exports of 6 times
from present level of 0.5 billion in 2010.
The Government has already set up Telecom Equipment and Services Export
Promotion Forum and Telecom Testing and Security Certification Centre (TETC).
A large number of companies like Alcatel, Cisco have also shown interest in
setting up their R&D centers in India. With above initiatives India is expected to
be a manufacturing hub for the telecom equipment.
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