India Adds 13M Subs in February

India's mobile operators added 13.44 million connections in February, according to the latest figures from the Telecom Regulatory Authority of India (TRAI) .

That may be lower than the incredible 15.4 million additions reported in January, but it still keeps India firmly at the top of the global mobile growth table. (See India Adds 15M Mobile Subs in January.)

China is an increasingly distant second with 8.49 million new connections in January, the most recent period reported by that country's Ministry of Industry and Information Technology (MIIT).

Teledensity in India is steadily rising on the back of this wireless growth and reached 35.65 percent at the end of February, one percent up on January. This growth is set to continue with long-term potential for new connections in rural areas and broadband services.

Broadband, defined by the TRAI as connections running at 256 kbit/s or more, is still in its infancy, but the number of connections rose again in February to 5.85 million, with just more than 40 percent of those connections coming in the past year.

Recent high-speed broadband deployments, such as that by Tata Teleservices Ltd. in Mumbai, are adding functionality, but it's the widespread deployment of 3G and WiMax that is expected to provide more affordable access and make broadband a mass market consumer proposition in India. (See IndiaWatch: Towering Investments.)

According to C.S. Rao, chairman of the WiMAX Forum India Chapter, demand is already high, with 54 percent of Indians under 26 seeking wireless broadband services.

Rural penetration of telecom services is high on the government’s agenda, but has so far fallen short of expectations. At the end of 2008, rural teledensity was 12.59 percent, compared with 81.38 percent in urban areas, according to the TRAI, which also published its recommendations to accelerate rural connectivity today.

These center on the role of the Universal Service Obligation Fund (USOF) Administrator, which is responsible for using the funds raised through the universal service levy to promote rural connectivity.

First, and (judging by the bold type in its press release) most important to the TRAI, the management of the fund has to be separated from the Department of Telecom (DoT). This would include financial control, with money accrued from the USOF levy managed by the administrator, and not routed through the central government budgetary process.

This, believes the TRAI, will help unlock the funds that have been gathered under the scheme but not yet allocated. Since the beginning of 2002, about 204 billion Rupees (US$4.06 billion) in USOF funds had been collected, but only about INR67 billion ($1.33 billion) had been distributed to projects, according to the TRAI.

In addition, the TRAI suggests the fund be used to offer better incentives for effective network deployment, including financial benefits for tower sharing and backhaul network installation.

The Regulator also reiterated its recommendation that the universal service levy be reduced from 5 percent to 3 percent for service providers that reach 75 percent coverage of the development blocks and villages identified under the universal service obligations.

— Catherine Haslam, Asia Editor, Light Reading

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