Telecom revolution in India

Growth of telecom in India has been phenomenal - nothing less than a 'revolution'!

The first level of this revolution happened in 1980s when the then Prime Minister Rajiv Gandhi brought Dr. Sam Pitroda to pu growth of telecom in India on fast track. The ubiquitous PCOs (public telephone booths) that have now reached every small town and village of India was one big contribution to India's telecom revolution from Rajiv Gandhi and Sam Pitroda.

But if that success was big, the growth of mobile (wireless) telephony in India is humongous!

By Sept 2008 the subscriber base in India crossed a mamoth 300 million - with over 233 million GSM subscribers and over 80 million CDMA subscribers (http://mobile.broadbandindia.com/2008/10/77-mn-gsm-net-adds-in-sep-2008.html)

And yet, India's mobile penetration is below 25%  - so imagine the kind of growth potential India still offers.

Indian subscriber base is expected to touch 529 million by 2010. Note that the population of entire Europe is around 400 million - and has already reached 100% mobile coverage. So by 2010 India's subscriber base alone would be more than that of entire Europe - and yet, it would be less than 50% of India's total population. 

These are the numbers that are attracting every BIG NAME in global telecom players to India - be it Vodafone or Virgin Mobile or Indian giants such as Bhari Airtel and Reliance.

Having said this, the average revenue per user (ARPU - i.e. the amount of monthly bills a subscriber pays) is still abysmally low at Rs. 300 versus over Rs. 1000 in developped markets. But right now the race is for volumes - increasing subscriber base; not for quality of service or the profitability (ARPU). So at least for some time to come, you will see subscriber base in India swelling while the ARPU keeps on plunging.

In fact India's ARPU is already one of the lowest in the world. 

Source: http://saunderslog.com/wp-content/uploads/Test_EFD3/image.png

Right now the focus is on volumes - getting as much subscribers as possible; rather than on service quality or profitability (ARPU)...and this will continue at least for foreseeable future, till mobile penetration in India reaches a substantial number.

I am betting big on large Indian mobile companies - mainly Bharti and Reliance - to give handsome
re
turns on onvestment.

The Indian telecom story has just begun...