India’s mobile phone connections have touched the landmark number of 30 crore and broadband connections are kissing 50 lakh, but wireless expansion could fly in the face of the other, industry officials say.
In the volume-driven market in which voice calls are the main money spinner, capital expenditure chasing profits is courting wireless networks than fibre pipes for broadband.
“Considering there are about 29.6 crore wireless subscribers at the end of July and the fact that we are adding over 85 lakh subscribers every month, we would have crossed the 30 crore mark by August-end,” said Madhusudan Gupta, analyst at industry researcher Gartner.
“India remains a voice-centric market and fixed lines have remained neglected as voice need is fulfilled by mobile,” said fellow Gartner analyst Neha Gupta.
India is the second largest mobile phone market in the world, second only to China.
The furious wireless expansion has ominous signals for 3G (third-generation) services due to start next year. The high-bandwidth spectrum may be used more to pack voice calls than for activities like video downloads. The country’s broadband links of around 47.5 lakh are less than 10 per cent of the 5.5 crore overall Internet connections that include slow dial-up links.
While high average revenue per user (ARPU) is the key driver, telecom companies will strive to keep 3G affordable, industry officials say.
The Department of Telecommunications (DoT) had targeted to have about 50 crore mobile subscribers and 2 crore broadband subscribers by 2010. While the former looks easy, the latter could be missed.
Poor infrastructure is said to be hampering broadband growth but industry executives are optimistic.
“Broadband is eight years behind telecom and is in the same sweet spot in which telecom was in the year 2000 and heading for a faster growth,” said Manoj Kohli, Joint Managing Director at Bharti Airtel Ltd.
For expanding beyond the metros, price will continue to remain a key differentiator. “3G can serve as an ideal platform to deliver low-cost voice telephony to Indian consumers, in turn increasing usage,” said Anil Sardana, managing director of Tata Teleservices.