Indias telephone revolution unfolds

This is a historic week for India. the Government of India (Press Information Bureau) has already officially announced that the country has crossed the milestone of 100 million in the installed base of telephones. With this landmark achievement, India has the fifth-largest telephone population in the world, after China, USA, Japan and Germany. Though we have a long way to go in terms of tele-density; ours is still short of 10 per 100 population, with China having crossed 50 and the other three countries having a tele-density of more than 100 phones per 100 people. It was also the week when the Chinese Prime Minister, Wen Jiabao, was visiting India. He talked of the two pagodas (of Chinese hardware and Indian software) working together to create the Asian Century. Yet

another interesting coincidence was the formal launch of Nokias handset manufacturing plant in Chennai, with an estimated investment of up to $100 million (this plant is likely to start production before the end of 2005) and the first Bangalore-made mobile handset coming out of Elcoteqs production line. The Government of India and the optimistic ICT minister, Maran, are even talking of 200 million phone lines by 2007, with more than half of these mobile phones. It was in December 2002 that the mobile population crossed the 10 million mark; I wrote a story on it in The Financial Express of January 10, 2003. What does the 10-fold increase in three years mean, in the broader context? What are the lessons learnt? India had 80,000 telephones in 1948, that jumped to one million in 1971, two million in 1981 and five million in 1991. And 40 million in early 2005. Mobile phones started ringing in India in the most unexpected place the City of Joy Calcutta on August 23, 1995. It took three years to cross the one million mark, in 1998. It crossed three million in 2000, five million in 2001, 10 million in 2002 and, finally, 50 million in early 2005; the combined population crossed 100 million this week. What is interesting is the way telephones were administered by the government monopoly for nearly 50 years (1947-1995) of postindependent India. The telephone was considered an item for the rich (with a call rate of Rs 16.80 per minute for mobile phones in 1997). There were so many telecom policies. The regulator, Telecom Regulatory Authority of India (Trai), came into existence only in 1997. There was endless litigation, with courts ruling and over-ruling earlier decisions.

In 10 years, we have got the worlds fifth-largest telephone population This shows the resilience of the Indian market, if allowed to operate

The recent years have, indeed, been exciting. Private Telecom Service Pro-viders contributed over Rs 10,000 crore of license fee to the government (these days they share a part of the revenue that is increasing every day). Prices fell to Rs 2 per minute in 1999 and to 40 paise per minute recently, thanks to Reliance. A billion-dollar company, Bharti Telecom, was born in 2004; interestingly, Bharti is making a profit, though it buys equipment at international prices and the Indian call rate is one of the lowest in the world! An average Indian today gets a phone with no waiting time and the mobile phone has practically no downtime; he/she can also expect a service, rather than being shouted at by a high-handed telecom employee. With services available in hundreds of towns and thousands of villages, telephones are for Indians and not for those who rule India alone! All these demonstrate the resilience of the Indian market. People will pay for services, a good technology that delivers value is not easily stoppable and policy muddles, reversals, legal wrangles, etc., will ultimately give way when people are behind the change. People will discover their best option themselves, instead of being dictated by a state monopoly. It is a silent revolution, where every tenth Indian is talking on the phone

today and soon every fourth Indian will do so. India has been talked about in IT; with Indians doing IT and talking on phones and joining hands with the Chinese, ICT will surely usher in the Asian Century.