3G and BWA rollout to re-invigorate aggressive growth, says FICCI-KPMG report
- Rural market to drive next round of growth for voice-based
- Data services to create the churn within maturing urban
A FICCI-KPMG report titled Broadband for All reveals that telecom
companies, whose operating margins are under pressure due to usage of multiple
SIMs, tariff corrections and rising competition are keenly awaiting the roll-out
of 3G and BWA to bolster the maturing urban markets and enhance margins.
The report was released here today by Kapil Sibal, Union Minister for Communications
& IT, at the inaugural session of India Telecom 2010.
The FICCI-KPMG report points out that the broadband sector is expected to grow
in the future as 650 million potential customers are waiting to be tapped. Rural
India, the report states, is the key target market likely to drive the next
round of growth for telcos, particularly for voice based services.
The report highlights the primary reasons for the nascent growth of broadband
in India. It also tracks all the government efforts that are being made to achieve
the growth of broadband and gives an overview of how the growth of broadband
will actually contribute to the overall development of the economy.
India is ranked amongst the fastest growing telecommunications markets across
the globe. The average monthly mobile subscriber growth over the past year has
been 15-17 million customers. Currently, the mobile subscriber base is 800 million.
The overall tele-density for India has already surpassed 60% and the market
continues to exhibit unabated growth. In comparison to the mobile growth, the
broadband penetration across India has been rather under tapped with approximately
10.08 million subscribers as of August, 2010. The contention ratio (number of
subscribers accommodated in a given bandwidth) in India is high i.e. service
providers provision an average 130 subscribers in 52 Kbps bandwidth, whereas
internationally the same ratio is not more than 50.
Said Dr. Amit Mitra, Secretary General, FICCI, The present phase is extremely
exciting for the telecommunication industry which is looking forward to 3G and
BWA rollout to help re-invigorate the aggressive growth that the industry has
witnessed in the past two years. Rapid swelling in the subscriber numbers
has resulted in urban teledensity exceeding 100%. The rural market is expected
to drive the next round of growth for the voice-based services, while data services
will create the much needed churn within the maturing urban markets, he added.
According to Romal Shetty, head of telecom, KPMG India, improving broadband
penetration in the country has emerged as the need of the hour. Strong government
support coupled with key initiatives from the private operators will help ensure
connectivity for the remotest parts of the country and will further the government's
agenda of providing basic healthcare, banking and e-governance facilities to
all, he opined.
The primary aim of the Broadband for All movement is to ensure that
all Indians are able to connect with the world and are able to remotely access
basic facilities like health, education, banking, commerce, entertainment, utility
and e-governance services to enhance their quality of life.
The report highlights the following aspects:
- Evolution of telecom industry and its initiatives over
the last decade
- Importance of broadband and data services market in India
- Key ecosystem requirements and strategies that telcos
may follow to achieve government targets of broadband subscriptions.
- Growing importance of broadband and how it has the potential
to contribute to the overall socio-economic development of rural India and
project it as a powerful economy
- Government initiatives to reach the rural population explore
the idea to take optical fiber cables to 3.74 lakh villages having a population
of 500 or more