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3G auction to open doors for foreign players: Economic Survey

3G auction to open doors for foreign players: Economic Survey
PTI
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First Published: Thu, Feb 25 2010. 02 16 PM IST
Updated: Thu, Feb 25 2010. 02 16 PM IST
New Delhi: The government on Thursday said the upcoming auction of radiowaves for the third generation mobile services will open the doors for foreign players to make an entry into fast growing Indian telecom market.
The Economic Survey 2009-10 tabled in Parliament on Thursday said that “... This (launch of 3G technology) will provide existing operators a good opportunity as also foreign players to make an entry into the Indian market and bring in new technology and innovation.”
There is no cap on the number of service providers in each circle. For the 3G telephony, the government is planning to allow three to four private players in each circle depending upon the spectrum availability.
The auction of 3G and Broadband Wireless Access (BWA) spectrum scheduled to be held on 9 April. The government had earlier indicated that interested foreign entities could take part in the auction directly.
The Survey said that the introduction of BWA services will enhance the broadband penetration in the country. The broadband subscriber base stood at 7.98 million by the end of December 2009.
Terming the growth of wireless mobile telephony in the country “spectacular”, the Survey said the target of having 600 million subscribers by the end of 11th Five-Year Plan (2007-12) has been achieved before the end of 2012.
At the end of October 2009, the total telephone subscriber figure was 562 million.
Though the wireless connections grew at a compound annual growth rate of 60% since 2004, the wireline connections had declined in recent years.
Teledensity, an important indicator of telecom penetration, increased from 37% in March 2009 to 47.9% in December 2009.
While the urban teledensity crossed 110.7% the rural teledensity stood at only 21.2% at the end of December 2009.
The Survey proposed to achieve rural teledensity of 25% by means of 200 million rural connections by the end of 11th Five-year Plan (2012).
About telecom manufacturing, the Survey said that favourable factors such as facilitative policies, large talent pool in research and development and low labour cost can provide an impetus to the industry in the country.
The production of telecom equipment in value terms increased from Rs48,800 crore during 2008-09 to Rs 57,584 crore during 2009-10.
The Survey said that the opening of the telecom sector has not only led to the rapid growth in the subscriber base but also helped a great deal towards maximisation of consumer benefits, particularly in terms of price discovery following a forbearance approach in tariffs.
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First Published: Thu, Feb 25 2010. 02 16 PM IST