Robust Growth in Telecom Amid Shadow of 2G Case

Monday, 26 December 2011, 15:24 IST
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New Delhi: The legal tangle involving the allotment of airwaves for second generation (2G) telephony may top people's memory as far as this industry goes in 2011. But it was also another year of huge growth that saw subscriber base breach the 900-million mark. For the world's second-largest telecommunications market, 2011 was also about hopes of further policy changes, an enabling regime that would allow spectrum sharing for 3G services, consolidation and regulatory stability among other things. "It's been a turbulent year," said Mahesh Uppal, a noted telecom analyst and director of consultancy firm Com First India. "Industry struggled with negative news. But the quality of service improved and subscribers got the gift of portability," Uppal told IANS. "It's not as if any of the negative issues has even remotely affected user-experience of services. There was recognition across the industry this year that the focus has to be on infrastructure, consolidation and spectrum." For the bulk of the year, focus was also on the charges against former telecom minister A. Raja and 13 others in what has come to be called the 2G case over the controversial allotment of scarce airwaves to new players in 2008. But that did stop growth. "The 2G case had a huge impact on industry. Investment from industry fell, the domestic banks stopped lending and foreign direct investment into the sector stopped because of uncertainty," said Rajan S. Mathews of the Cellular Operators Association. "Regulatory initiatives like the mobile number portability and dealing with issues such as pesky calls also put additional cost burden on the operators. But overall subscriber count grew, which was good news," Mathews added. As per latest data with Telecom Regulatory Authority of India (TRAI), the total number of telecom subscribers in India crossed 914 million on Oct 31 and tele-density increased to 76.03 percent from 787 million in December with tele-density of 66.16 percent. Jaideep Ghosh, director with KPMG advisory, also said that despite some shortcomings in areas like infrastructure, the industry saw a positive outcome in terms of both tele-density and user-experience. "Though the infrastructure for many services is still being rolled out, the devices we had in the year, complemented by low-cost tablets, were a huge thing to be recognised," he said, hoping for better times ahead, including a recast National Telecom Policy. Added Mathews: "I am sure the industry will be back on track in 2012. But for that, there must be more clarity on certain issues like re-licensing norms, pricing of spectrum, availability of additional spectrum. All this will give a further boost to industry." Key developments in telecom during 2011: - Pan-India mobile number portability launched, but mere two percent opted for this service. - Former telecom minister A. Raja, along with his DMK party colleague and Rajya Sabha MP Kanimozhi and 12 others taken into custody in the 2G case. Some were later granted bail. - Leading telecom operator Bharti Airtel announced a 20-25 percent hike in its tariffs in selected regions; others followed suit. - To bar pesky calls, a National Customer Preference Registry came into force, bringing some relief. - India's $35 tablet computer "Aakash" unveiled even such launches flood market. - Draft National Telecom Policy unveiled, proposing spectrum-sharing, free roaming and easy mergers. - Sharing of 3G spectrum banned as industry appeals to Prime Minister Manmohan Singh. - Communications Minister Kapil Sibal moves to regulate content in social networking sites like Twitter and Facebook. - Prime Minister assures stakeholders that industry woes will be addressed.
Source: IANS
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