Dramatic growth

Print edition : November 18, 2005

The LG GSM handsets unit at Ranjangaon, Pune. -

With constantly evolving technology and a rapidly increasing customer base, the growth opportunities for the telecommunications sector in the State are endless.

AS one of India's major commercial centres, Maharashtra has a strong telecommunications sector. The number of cellular phone users in the Mumbai, Maharashtra and Goa circle is around 12 million, and it accounts for 19 per cent of the all-India base. The number of landlines is around 5 million.

The country's commercial capital, Mumbai, has around 7 million telephone lines, of which 4 million are cellular phones, says Kuldeep Goyal, Executive Director of Mahanagar Telephone Nigam Limited (MTNL), Mumbai. "The market is growing both in the cities and in the towns. There is scope to increase the number of cellular phone users in Mumbai by 4 million. Around 40,000 new mobile connections are added every month," Goyal said. MTNL plans to increase its cellular capacity by 20 lakhs in a year. Its WLL (Garuda) capacity will also be extended by four lakhs in a month.

The telecommunications market's reach is likely to spread dramatically in the coming years. The cellular phone industry has grown across India at around 92 per cent a year in the past six years and the trend will continue, says T.V. Ramachandran of the Cellular Operators Association of India. There were 62 million cellular subscribers in India as of August 2005, and 1.5 to 2 million new users are added every month. The Indian cellular network now covers 4,000 towns and cities and 60,000 villages. The total investment in the sector is Rs.50,000 crores and it contributes Rs.31,000 crores to the nation's gross domestic product every year, according to Ramachandran. Around 36 lakh jobs are generated by the industry. Teledensity has grown from 1.3 per cent in 2000 to 9.08 per cent in 2005. However, rural coverage still remains low at 1.74 per cent.

The Communication and Information Technology Ministry's target is to have 250 million telephone connections by December 2007, says K.G. Sharma, Chief General Manager of Bharat Sanchar Nigam Limited (BSNL) in Maharashtra. "BSNL and the private service providers will have a share of 125 million each. We have 45 million subscribers at present, of which seven million are in Maharashtra," said Sharma.

BSNL plans to cover villages with a population of over 5,000, besides tourist spots, pilgrim sites, railway routes and national highways. So far it has covered 1,200 of the 43,000 villages in the Maharashtra and Goa circle. New technology, such as Code Division Multiple Access (CDMA), makes it easier and cheaper for telecommunications to reach far-off rural areas, as there is no need to lay cables anymore. Just one CDMA unit can cater to an area within a 25 km radius.

One of the major CDMA providers is Reliance Infocomm Limited, which sees non-metro circles and category `B' and `C' towns as the new areas of growth for wireless phone services. "All the district headquarters are covered by cell phones. Besides, around 400 towns have cellular coverage, which includes 85 per cent of taluk headquarters. Reliance Infocomm gives the unique advantage of giving Voice cum Data applications all across Maharashtra and Goa (more than 350 towns) on the handset so that customers can enjoy seamless data connectivity while on the move," said Athul Jhambh, Chief Executive Officer, Reliance Infocomm Ltd., Mumbai and Maharashtra and Goa.

The focus in the more saturated urban markets is on other services such as broadband, Wi-Fi (Wirefree Internet access), Wi-Max and value-added services to cell phones. "Mumbai has around 43,500 broadband connections and the number is increasing by 10,000 every month," said Goyal.

Wi-Fi is the new potential area of growth. Hot spots will be installed at public places for Internet access within 50 metres. Wi-Max technology is even more advanced than Wi-Fi, which allows access in a 5 to 10 km area. It will be a few years before it is introduced in India.

In cities, the focus in the cellular sector will be on value-added services and content such as information, entertainment, commerce, ringtones, downloads and so on. "At present, it constitutes 8 to 10 per cent of business and should grow to around 15 per cent in the coming years," said Goyal.

In the near future, a key growth driver will be data and value-added services, said Charles Antony, Managing Director, Tata Teleservices Maharashtra Limited. "As the market is becoming mature and data-focussed, the CDMA mobile business is going to grow rapidly. Till lately, cellular operators were fighting to retain their customer base on the basis of voice tariffs. Today, voice tariffs have reached rock bottom levels. As the market has matured, cellular operators are now looking at getting revenues from non-voice-based applications."

"We see market growth to be predominantly driven by the fixed wireless and prepaid cellular services," said Antony.

BSNL even sees opportunities for Maharashtra, given its industrial base and infrastructure, to manufacture switching, transmission and WLL equipment and WLL/cellular handsets. With technology constantly evolving, the opportunities for the telecommunications sector in Maharashtra are endless.

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