The Ministry of Communication and Information Technology has said its goal is to reach 85 percent mobile network coverage by 2007, and analyst firm The Diffusion Group (TDG) reckons that could happen -- given the focus of the Telecom Regulatory Authority of India (TRAI) and the Indian government on enabling competition and boosting foreign investment opportunities.
India has 13 mobile carriers operating in its 23 regions, of which four have licenses to operate in 20 or more regions. (See Table 1.) Table 1: Mobile operator coverage
|Service Provider||Number of licenses|
|Source: Telecom Regulatory Authority of India|
The Department of Telecom is in the process of evaluating applications from several regional operators to expand their networks into additional "circles," or regions:
- Idea Cellular Ltd. has applied for 12 more licenses to become a national operator, and this week received a letter of intent from the Department of Telecom to approve its long-standing application for a license in Mumbai. The carrier plans to invest 25 billion Indian Rupees (US$536.3 million) in its network this year. (See Birla's Big IDEA for India.)
- Spice Telecom has applied for licences in six additional circles where it hopes to launch services by the end of the year. The carrier also plans to double its cell sites in the Punjab region to 1,800.
- Aircel Ltd. has applied for 11 new licenses. Maxis Communications Bhd. , which paid $1.08 billion for Aircel in January, says it plans to spend as much as $1 billion to expand the operator's coverage and services. (See Maxis Snaps Up Aircel.)
- Reliance Communications Ltd. (RCom) has applied for four new licenses as part of its plans to create a nationwide GSM network alongside its CDMA network. (See Reliance Squeezed by Spectrum Crunch.)
The Diffusion Group's latest report, "India's Mobile Markets -- Analysis & Forecasts," projects the number of mobile subscribers in India will reach more than 350 million by 2010, up from 105.95 million at the end of June.
The country has a total of 153.37 million telephone subscribers, and the bulk of its telecom growth is likely to continue coming from mobile. The report notes that the cost of installing a new fixed line in India is roughly three times the price of installing a mobile connection.
Diffusion predicts total mobile service revenues will increase more than 170 percent from 2006 through 2010 -- a compound annual growth rate of 22.1 percent.
All this growth does have a down side for customers: Diffusion reports that, given the rapid pace of growth, upgrading carrier infrastructure has taken a back seat to network expansion, and quality of service in most areas is "extremely poor."
— Nicole Willing, Reporter, Light Reading