Growth of the Telecom Sector in India

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India has always been an attractive destination for international companies across the world. With its rapidly growing economy, India is making developments in all the sectors including the telecom. The telecom sector is gaining momentum with the advent of private players like Airtel, Reliance, Tata etc. in the field. Previously, telecom sector was monopolized by government-controlled BSNL (Bhartiya Sanchar Nigam Limited).

The telecom sector has registered tremendous growth over the years. As a result, India has become the third largest telecommunication network in the world. The subscriber base is increasing manifold and the country has emerged as the fastest growing telecom market in the world. Few decades ago having a telephone was a status symbol and owning a cell phone made one wealthy, but now, the prices of cell phones have come so down that even a rickshaw-puller can easily afford it.

After the Indian economy was liberalized, privatized and globalized, many private companies flooded the Indian market. The private operators not only provide cellular services but also landline. Some of the companies also provide WLL (Wireless Local Loop) services. Landline telephones have also changed their traditional nature; they are not only used for making calls but one can also send SMS or musical greetings by it.

India appeals to international market because of the low penetration levels of telecom services. Though, the number of subscribers is increasing day by day, it is still low compared to other countries. Strong economic growth has resulted in increase in the average income of the consumers thereby increasing their purchasing power is also one of the major factor behind the development of telecom sector in India. Another major reason is the easy availability of cheap and skilled labor which is beneficial for its expansion.

BSNL is the largest telecom company in India. BSNL and MTNL leads in the landline services while Bharati Airtel is the most important player in the cellular services. Telecom companies are facing stiff competition entering of the new players. This has led to sharp decline in the call rates and price of mobile handsets has also become cheaper. One can buy a branded handset at Rs. 1000.

Companies such as Reliance, Airtel, Tata and Idea are offering several schemes to attract consumers. Some of the schemes are call rates being Re.1 per second, making calls on the same network has become free or very nominal rate is charged. The monthly rentals have also decreased. Their ads are also very innovative and creative. Who can forget the Vodafone’s Zoozoo ads or Idea’s social message ads endorsed by Abhishek Bachchan? Mobile companies are also providing best offers on musical ring tones downloading wallpapers etc.

However, Indian market has still not reached to its saturation point. The telecom sector has to still make inroads in the rural areas. Companies should divert their attention to the rural areas to cater to the rural market. Government should also provide the companies secure environment so that they invest in India. This will ultimately benefit the consumers.

Shruti Roy

[Image courtesy: http://blog.i2fly.com/wp-content/uploads/2007/10/india-mobile.jpg]

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