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Indian telecom sector unaffected by global financial crisis: TRAI news
29 November 2008

"The current global financial crisis is, of course, now one of the major constraints on the pace of economic reform, but the Indian telecom sector, because of its innate strength and resilience, is perhaps one of the few sectors that have remained almost unaffected by this adverse global trend," said Nripendra Misra, chairman, Telecom Authority of India (TRAI).

He was speaking at the roundtable conference on 'India Telecom Landscape 2012', organised by the Confederation of Indian Industry (CII) here today. On this occasion, he also released the CII & EY Report - 'India 2012: Telecom Growth Continues'.

In his keynote address, Misra highlighted the new challenges facing the telecom industry. "The process of spectrum management must capture the three cardinal features of good governance - predictability, stability and transparency," he said, adding, "the entire decision making mechanism in the telecom sector should be in the public domain.

"We are facing challenges on different fronts. One is to ensure technology neutrality principle in the spectrum allocation. There are also talks about subscriber-linked spectrum allocation. But once we go for the auction route, we can not adhere to such methods," he said.

Misra said, "India's problems can not be solved in the regular prescribed environment. Rather, it must have India-specific approach. We must remember that 90 per cent revenue in the telecom sector comes from top 10 per cent and the remaining 90 per cent contribute only marginally."

 "Hence, I believe, a balanced look at the process of spectrum allocation, keeping in mind that the spectrum is such a scarce entity, is very important to maximise revenue earnings," he added.

 In his welcome remarks member of CII's national committee on telecom and broadband Rajat Mukarji, Chief Corporate Affairs Officer, Idea Cellular Ltd, said, "Telecommunication continues to be one of India's biggest success stories. In recent years, the telecom sector has been delivering strong returns on investments and steady subscriber additions."

"The telecom sector has charted an impressive growth trajectory, adding nearly 9 million subscribers per month. The main focus of the CII report, which it has come out in association with Ernst & Young, is on where the Indian telecom industry would be in the year 2012," he added.

Anil Sardana, chairman, CII National Committee on Telecom & Broadband and MD, Tata Teleservices Ltd, commented over a conference call that, "Indian telecom industry is poised to see some new and additional moments of glory. The enhanced competition for the benefit of customers, newer networks of 2G and 3G, participation of several international and reputed operators are some such developments, which would bring in improved services to the customers."

"The rollout of 3G could potentially transform the bouquet of services to customers, from vanilla voice and basic data to rich entertainment and far more. In the wake of such development, both the industry and the Government as prime mover and regulator, must continue to work closely ensure higher growth and better services to the customers," Mr Sardana emphasized, adding, "The Government must also strive to look at a new convergent policy that will cover not just telecommunication but broadcasting and entertainment too."

 It should be noted that the Indian economy has recorded GDP growth of over 8 per cent for 12 successive quarters since 2005. The telecom sector is expected to perform even better; its contribution to the nation's GDP is expected to increase from 2% in 2006 to an estimated 3.6 per cent in 2010.

The report also highlighted the fact that even as, positive trends in the telecom sector and economy reinforced each other in a virtuous cycle and caused a sharp acceleration in the demand for telecom services, there are also significant challenges for growth in 2012.

"We envisage that the telecom market will continue to grow and the total subscriber base is expected to double in the coming four years," said Mr Prashant Singhal, Telecommunications Leader, Ernst & Young India adding, "Every urban Indian should have a mobile by that time and then growth orientation would shift towards rural India."

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Indian telecom sector unaffected by global financial crisis: TRAI