In the next three years, India’s telecommunication sector will have investment around $24 billion. The country’s growing economy and rising demand of mobile-phones among the consumers have attracted new mobile companies. This is one of the largest investments seen in any country in the world.
The new companies are: Shyam-JFSC Sistema , Unitech Ltd, Datacom Ltd, BPL’s Loop Telecom, Swan Telecom, Reliance Communication, and Tata Teleservices. Business Standard reports:
The investments include between Rs 48,000 crore and 60,000 crore ($12 billion to $15 billion) from six new telecom players (including Reliance and Tatas’ proposed GSM mobile services) over 12 to 24 months to create capacity for 250 million more mobile subscribers.
This fresh investment will be over and above the estimated Rs 48,000 crore ($12 billion) being put in by incumbents like Bharti Airtel, Vodafone-Essar, Idea Cellular, Bharat Sanchar Nigam Ltd, Reliance Communications and Tata Teleservices (the latter two for ramping up CDMA mobile operations) in 2008-09 alone.
The new entrants in GSM services, which account for the bulk of mobile telecom services in India, were offered letters of intent for licences by the Department of Telecommunications and have since paid the required upfront licence fees toegther with some incumbents.
Most of the mobile-phone companies in India use GSM. The new companies were given letters of intent by the Department of Telecommunications and they paid the license fees. They will get full license by next week.
The main reason behind this sudden hike in investment is the prediction of the rapid growth of India’s mobile-phone users to 500 million from the present 240 million within 2010.
In the South Asian region, India is the largest country in terms of land mass and number of people. Added with that, the country’s rising economy especially, the growing middle class, easy availability and lower tariff have boosted the popularity of mobile-phone. According to the forecast of Standard Chartered Bank, the number of mobile-phone users in India will rise to 600 million by 2012 and every second person in the country will carry a mobile. Not only in India, but also in other South Asian countries, mobile-phone market is increasing rapidly. I live in Bangladesh. Everyday, a significant portion of the advertisements in newspapers and magazines are devoted to various mobile service offers, phone sets and other mobile-phone related products. Personally, I am not a big mobile lover but I know many people around me having more than one sim card from different mobile-phone companies and changing their mobile-phone sets after every one year. The easy availability, lower cost and multiple functions have turned mobile-phones into something more than just communicative devices. Now, the big questions for countries like Bangladesh or India are, how long this popularity will continue and as the market is becoming more competitive how long it would take the companies to come into the profit phase?
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