Indias telecoms sector may attract about a billion
dollars of foreign direct investment in the year
ending March 2007 as global majors boost operations,
Communications Minister Dayanidhi Maran said
recently.Maran who met top officials of global
telecoms gear makers such as Nokia, Motorola and
Alcatel at a recent 3GSM conference at Cannes
said many global firms were positive about starting
manufacturing in India.
Nokia and Elcoteq are planning to set up units in
the country. If all the investments fructify then
the foreign investment should be around $1 billion
in 200607.
India, Asias fourth largest economy, has set a
target of attracting $800 million in foreign
investment in the year to March 2006.
A combination of low wireless penetration of just
5 users in 100 people and rockbottom call rates of
about 2 to 3 US cents a minute have made India the
fastest growing major mobile market in the world.
There are about 52 million wireless customers in
India and the number is widely expected to cross 80
million by December 2005. About 2 million new mobile
customers are entering the galloping sector each
month.
Much has been said about the booming Telecom
sector in India. That India is the second largest
telecom market in the world after China and that
India has emerged, as one of the fastest growing
markets, adding around two million fixedcummobile
phones per month is what everybody knows. However,
there havent been many reports giving the estimates
of how much would the country need to flourish in
this sector. Analysts say that telecom industry will
require about $70 billion (Rs 1600 billion) in the
next couple of years to achieve a target of 250
million subscribers by 200708 from the present 85
million.
Its been noted that there havent been any huge
investments rushing in from the foreign countries.
Reports say that only $2 billion have been invested
in the Indian telecom even as the Indian government
allowed 49 per cent FDI. Looking at this trend,
analysts predict that there is no urgent need for
the government to raise the FDI limit to 74 per
cent. Speculations say that the influx of
investments might not be phenomenal even if the FDI
is raised.
They also suggest the telecos can achieve the
target of achieving higher teledensity by procuring
hardware and OSS/BSS systems designed, developed and
manufactured locally so as to lower the acquisition
cost, provide better service and ensure speedy
upgradation. Public Sector Company Bharat Sanchar
Nigam Limited has alone been striving all these
years to increase the teledensity. According to
industry sources, about $50 billion has been
invested in the telecom infrastructure over the
years with the stateowned Bharat Sanchar Nigam Ltd
(BSNL) alone contributing $ 22.5 billion.
According to Gartner estimates the APAC region
will surpass the European growth by 2008 with about
$400 billion in revenues, next only to the US.
Govt needs Rs 300,000 cr for telecom
The Centre said it would require an investment of
about Rs 300,000 crore for the equipment to roll out
broadband services and 150 million new telephone
lines over the next three years.
The total investment will be divided equally for
broadband services and setting up new telephone
lines, the Minister Of State For Communications And
Information Technology Shakeel Ahmad said.
In the broadband policy the government has
envisaged to achieve a target of 40 million Internet
and 20 million broadband subscribers by 2010.
Speaking at the inaugral session of Convergence
India 2005 Ahmad invited companies to set up more
manufacturing facilities in the country in wake of
huge growth in telecom subscriber base in the
country.
Few companies like Nokia, LG, Alcatel and Elcoteq
have shown interest to set up manufacturing bases
here. But there is scope for more participation of
the other leading industries as the demand is huge,
Ahmad said.
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