Tuesday, June 3, 2008

India replaces US as the second largest Cell phone market

One could not have imagined our country would so quickly grow in telephones and cellphones. If anybody who is reading this article remembers 1986, it was Rajiv Gandhi who first created Ministry of Communications and his long time friend Sam Pitroda was put in charge of it. The bureaucracy was so resistant to the change and did not want Pitroda to initiate any changes. At that time if someone booked for a telephone it would take years to get one. Because of Pitroda, PCO concept became a household business. Despite its penetration, the quality of service was too bad.

Come 2008, India today replaces USA and is second(first is China) in the world in terms of number of cell phone subscribers. Cell phone has overtaken fixed, wired telephony. The prices of telephone call is the lowest in the world.

Calls from PCOs give operators much better profits than from subscriber telephones. Private operators have realized this, and set up large numbers of PCOs. Out of the 6 million PCOs at the end of 2007, only 2.2 million belonged to BSNL and MTNL. Bharti had set up 2 million, Reliance 1.9 million and Tatas 1.4 million. Villagers have roughly 12 million wireline telephones and 52 million cellphones — which gives us a total of 64 million rural telephones.

The next revolution already visible is rural cell phone revolution. Recently, Reliance and Airtel have ventured into rural markets with even cheaper prices. By another two or three years the teledensity will surely become greater than 75%. In 2004, I was surprised to see a painter having cell phone in my college. Now, it is not surprising if a vegetable vendor says he will let you know if vegetables have arrived or not via his cellphone. On a seriously hilarious note, the most talked about negative impact of cell phone is that the husbands complain that their wives call on their cells just to find out where they are.

The cell phone network is on a full swing in border areas like Kashmir and Arunachal Pradesh where till now was not expanding because of security issues.

Recently, the government has decided to roll out 3G by 2008 year end. FDI in Telecom is 75% and this has created a huge market for foreign players. With Vodafone having made its entry it is just the beginning of a new revolution.

Thanks to 4 people who made this happen - Late Rajiv Gandhi(Congress), Late Pramod Mahajan(BJP), Dayanidhi Maran (DMK) and Sam Pitroda. The telecom policy 1999(Pramod Mahajan) was the one that triggered a revolution that picked up pace like never before. Thanks to Dayanidhi Maran who made Rs. 1 per call across the country possible.

PCO is a huge business in India today. This is rather unusual that even before education, health revolution happened, telecommunication revolution has happened.

WiMax is the next hottest thing in India. When I had to study VSAT deployment in Madhya Pradesh as a case study in my course in US, I was surprised. This is a starking reality. Communication is continuing to change and reshape lives in India.

No comments: