India, the world’s fastest growing mobile telephony market, will consider a plan to abolish domestic roaming charges, Andimuthu Raja, the new communications and IT minister, said on Wednesday as he took charge of the ministry. The government will also give top priority to expanding services in villages and small towns, he added.
“Top priority will be given to rural telephony,” said Raja. “The telecommunications sector’s growth is yet to reach people at the lowest” level.
New Delhi and Mumbai have a telephone penetration of more than 50% as carriers target users with higher disposable incomes. In rural areas, where two-thirds of India’s 1.1 billion people live, phone use is limited to below 3% because of lack of networks. The country’s total phone density is more than 18%.
Raja, 44, took charge of the ministry, which also controls the export-oriented software industry, after Dayanidhi Maran quit on 13 May due to differences with his party’s leadership. Raja said he would seek continuity of policies and will welcome overseas investment in telecommunications and computer services. “I will discuss with my officers how we can attract more investments in the sectors from different countries,” he said.
Through policies designed by Maran, India attracted more than $20 billion in investment pledges in both the telecommunications and IT industries. Companies such as Ericsson AB, Motorola Inc. and Flextronics International Ltd have set up factories in India.
Maran had said on 22 March that he expected as much as $5 billion (Rs22,000 crore then) to be invested in semiconductor and other electronics factories in three years, after a policy offering incentives to manufacturers came into effect.
Raja, who was earlier in charge of the ministry overseeing environment and forests, said he would “look into” Maran’s plans to abolish domestic roaming charges starting 3 June.
India is adding an average of six million new mobile users each month as carriers such as Bharti Airtel Ltd and Reliance Communications Ltd already offer the world’s cheapest local mobile call rates of as low as 40-80 paise a minute.
In the past year, the country’s telecom regulator Trai and the ministry have introduced rules that have cut long-distance and overseas call rates as well.