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Concerns over telecom decline in India
By agencies
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Tuesday, 17 May 2005, 19:30 IST
NEW DELHI:Even as India's telecommunication market has become the fastest growing in the world, lack of growth in the rural sector and in the non-wireless segment has raised concerns on the eve of the World Telecom Day.
While the mobile segment has grown by more than 100 percent over the last one year, other segments of telecommunication such as Internet services, paging, fixed line telephony and long distance telephone services has been witnessing a slump in growth.
For instance, in the Internet service providers (ISPs) segment, more than 50 percent of the 700 licensees are non-functional. Barring a few ISPs such as Sify and Net4India, most of the ISPs have shut.
Internet telephony, which was launched with much hype, has been able to garner only 6 percent of the long distance calls market share. Internet subscriber base has crawled to 5.5 million, which is much lower compared to other developing countries.
Paging sector is another segment that has been wiped out making India the only country where the service has become defunct. From over 700,000 subscribers in 1999, the number of paging users have declined to just few thousand. Most paging companies have since become call center operators. Though many push the advancement of cellular technology as the reason for the demise of the paging industry, the operators point to the U.S. and China where service exists despite being the largest mobile markets.
The fixed line telephony is also on its decline. The total fixed line telephone user base grew 3.3 percent during 2003-04 compared to a growth of 17.9 percent during 2001-02. Most of the private fixed line operators have taken the license to offer mobile services.
While a shift in demand towards cellular phone is primarily responsible for the decline, experts opine that fixed line telephones can still be promoted for data transmission and corporate connectivity.
International long distance market has also shrunk from $1 billion in FY 2003 to $900 million in FY 2004. Domestic long distance market has also declined from $1.3 billion to $1 billion over the period.
As India celebrates 150 years of telecommunications, the industry has also expressed concerns over issues such as strengthening the regulatory process. The Telecom Regulatory Authority of India is still funded by the Government and has no real powers to enforce the policies.
While consumers have enjoyed the cheapest tariffs in the world, quality of service is a major issue. The telecom regulator in its performance indicators report has admitted that the quality of service being offered by operators needs to be improved drastically.