Foreign investment may double in Telecom and IT

By agencies   |   Thursday, 22 December 2005, 08:00 Hrs
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NEW DELHI: According to the information technology ministry, planned foreign investment in India's booming telecom and information technology sector is expected to double to $22 billion in 2006, as global majors focus increasingly on the country.

The information technology Minister, Dayanidhi Maran said, “The world is starting to look at India seriously. Almost $9 billion in planned investment has been announced in 2005, including $3 billion by SemIndia and chip maker AMD, $1.7 billion by Microsoft Corp and more than $1 billion each by Intel Corp and Cisco Systems Inc.”

The last three or four investments have come from the U.S. This is a very significant development for us – when companies like Cisco, AMD and Intel, Microsoft are looking at India seriously. Almost all global telecoms equipment majors such as Ericsson, Nortel Networks Corp and Nokia have made a beeline to Asia's third-largest economy, also the world's fastest-growing major mobile market.

Maran said, “I would like to see more European companies as well as firms from Japan to invest in India. Europe has still yet to invest except Nokia and Ericsson. We (also) want Japanese companies to come and invest in India.”

It is expected that the number of new wireless subscribers to hit between 4 million and 5 million a month in early 2006. At present, India has 72 million mobile users, more than the population of Italy, having added 3.49 million in November, up from 2.73 million in August. The reason behind soaring user base is because of carriers such as Bharti Tele-Ventures Ltd are expanding their networks into untapped rural areas where more than two-thirds of the billion-plus population lives.

Falling prices of handsets, partly due to local manufacturing by players such as LG Electronics Inc, are also fuelling demand. Apart from this, Maran also sees strong growth in business services and IT, saying an industry study forecasting 28 percent growth a year to $60 billion in exports by 2010 may be too conservative. “I think this growth (forecast) for the IT sector should be definitely more bullish,” he added.

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