India needs $70 B investment for telecom growth'
Tuesday, 07 December 2004, 20:30 IST
Printer Print Email Email
BANGALORE: The Indian 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 2007-08 from the present 85 million. As the second largest telecom market in the world after China, India has also emerged as one of the fastest growing markets, adding around two million fixed-cum-mobile phones per month. Disclosing this here Monday at the regional summit of the Tele Management Forum (TMF), Telecom Equipment Manufacturers Association of India (TEMA) chairman N K Goyal said though the government had allowed 49 per cent FDI (foreign direct investment) in the telecom sector, only $2 billion had come through the FDI route so far. "It is to be seen how much more FDI will flow into the sector if the limit is increased to 74 per cent, as being considered by the present government. "Even with the 49 per cent limit, not many overseas firms had invested up to the present limit except a couple of them. Hence, there is an urgent need to raise resources internally to keep pace with the phenomenal growth," Goyal told reporters on the sidelines of the two-day summit. According to industry sources, about $50 billion has been invested in the telecom infrastructure over the years with the state-owned Bharat Sanchar Nigam Ltd (BSNL) alone contributing $ 22.5 billion. "The government has set up a panel to earmark the required investments to be made by the various stakeholders, including OEMs (original equipment manufacturers), service providers and the system integrators. "While the onus is on the fixed and mobile operators to strengthen and expand their existing networks to increase the teledensity to 10 per cent from 6-7 per cent currently, the government is contemplating to set up a telecom finance corporation for raising the required funds," Goyal stated. He said one of the ways telecos can achieve the target is to procure hardware and OSS/BSS systems designed, developed and manufactured locally so as to lower the acquisition cost, provide better service and ensure speedy upgradation. Earlier, delivering the keynote address on "Telecom in India: Opportunities & Challenges", Satyam Computer Services vice-president T R Anand said the telecom industry would be the growth engine of the services sector in the subcontinent. "Unlike the developed countries, India has the 'no legacy' advantage to leapfrog into emerging opportunities by leveraging wireless technologies and broadband to provide innovative services spanning voice, data and video at affordable prices through lean operations," he said. With China and India leading the telecom growth in Asia, global research and analysis company Gartner estimates the APAC region will surpass the European growth by 2008 with about $400 billion in revenues, next only to the US. The worldwide market for telecom equipment and services is expected to reach $1.7 trillion by 2008, growing at a CAGR (compound annual growth rate) of 6.1 per cent from $1.3 tillion in 2003. "As one of the fastest growing telecom markets, India stands side by side with the West, leaping into technology infrastructure investments that need to follow the lean operations model."
Source: IANS
siliconindia