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Communications & IT

To provide the communication facilities to the people at the lowest ebb of the social order" is his prime objective and synchronizing this "his top priority area would be rural telephony." This is the crux of the message that India's ne

Communications and Information Technology Minister sought convey to the people of the country, to the ICT world in particular. Out of total 607491 villages in the country, 552824 villages have been provided Village Public Telephone (VPT facility as on March 31, 2007.

Bharat Sanchar Nigam Ltd (BSNL) has entered into an agreement with Universal Service Obligation Fund (USOF), DOT in November, 2004, for providing VPTs facility to 66822 accessible, undisputed and undisturbed uncovered villages havin population more than 100 as per census 1991, which are planned to be provided with VPT facility progressively by November, 2007. Out of the awarded village, BSNL has provided VPT facility to 46969 villages up to 31.03.2007.

Also, a scheme is being launched by the government to provide support for the provision of mobile services, including WLL services, in specified rural and remote areas, where there is no existing fixed or mobile services and is likely to be mad operational by June, 2008. About 2.12 lakh villages are likely to be covered under this scheme.

Since the telecom sector is a growing sector, all efforts required to maintain the growth tempo will continue, the minister assured the countrymen immediately after assuming the charge of his new portfolio. According to indian telecom regulato authority, TRAI, the total number of telephone subscribers have reached 212.02 million at the end of April 2007 as compared to 206.83 million in March 2007. The overall tele-density has increased to 18.74 in April 2007 as compared to 18.31 March 2007. In the wireless segment, 5.15 million subscribers have been added in April 2007 while 3.53 million subscribers were added in March 2007. The total wireless subscriber (GSM, CDMA & WLL (F)) base is 171.20 million now.

Total Broadband connections in the country have reached 2.43 million by the end of April 2007. The total number of existing ISP licencees is 382. India has set a target of providing 9 (nine) mn broadband connections by this year end and 20 m

connections by the end of 2010. The Parliamentary Consultative Committee attached to his Ministry, was recently posted about the availability of new disruptive wireless broadband technology, such as Wi-MAX. It is expected to start addin

more than a million broadband connection per month before the end of 2007. Wire line and wireless broadband to co-exist and expand together, New applications such as tele-aid medicines, IPTV, video conferencing, e-governanc e-commerce, etc., will be available to the citizens with broadband availability. Special emphasis will be for North-Eastern States and Jammu & Kashmir. The targets to be achieved under the broadband initiatives, broad strategy and action plans prepared by the BSNL and Mahanagar Telephone Nigam Limited (MTNL). It is envisaged under the action plan, that broadband coverage of

secondary and higher secondary schools, public health care centers and Village Panchayats would be provided by the year 2008. Broadband connectivity to one lakes Community Service Centers (CSC) covering 20000 CSCs by ADSL b

September 2007;1000 blocks by wireless broadband by December 2007 and the remaining 5000 blocks by wireless broadband with USO support by June 2008 would be provided. BSNL, as part of their action plan, have envisaged to add a average of 5 lakh broadband connections per month from January 2008. 80 percent of the exchanges would be broadband by the end of 2007 and roll out of IPTV in major cities. In addition to this, BSNL will aggressively roll out high speed broadband (like Wi-MAX) services and allow integration of multiple access technology like ADSL 2 +, VDSL 2, fibre-home, Wi-Fi, Wi-MAX, 3G, CorDECT, etc. The focus will be

provide multi-play instead of triple play. As a part of the strategy, MTNL has envisaged a target of providing one million broadband connections by the end of this year and addition of an average one lakh connections per month from Januar 2008. It has also decided to stren Its IPTV services which have been recently rolled out fully in Mumbai and in limited areas of Delhi.

To provide support from USO fund for mobile and broadband services in remote/rural areas, the Indian Telegraph Act has been recently amended. He also informed the members about the relaxation of restrictions of providing mobile service within 10 kms. of international borders to 500 metres except along the Line of Control and Line of Actual Control in the areas of Akhnoor and Pathankot of J&K.

Catching up with global peers

The Indian ICT industry have, not only managed to catch up with their more technology savvy global peers, but are also being actively sought by companies worldwide for their on-site, offshore expertise and wealth of manpower resource

Indian ICT organizations are counted among the well known and reputed ICT solutions and services providers across the world and scores of global ICT leaders have invested in India, making the country their hub for software developmen offshore outsourcing and R&D. The software and ITES exports from India is likely to exceed US $ 31 billion during the current year 2006-07 against US $ 12.9 billion in the year 2003-04 a compound annual growth of over 31% during the last five years. The IT sector has share of 5.4% in the National GDP. The software and ITES exports from India are estimated to cross US $ 100 billion during the year 2012.

India has taken major strides in the area of telecom from a monopolistic approach till mid 90s to the present day aggressive private and public sector competition. This has resulted in phenomenal improvements in tele-density, growing Interne

penetration and rapid expansion of mobile telephony across the country. Today, Indias more than 200 million telephone network is one of the largest in the world and we are adding 7 million telephone subscribers every month. The PC sale are expected to cross 6.5 million units during the year 2006-07.

As a step to make the country an information and knowledge society, India has drawn up a National e-Governance Plan (NeGP) with 27 Mission Mode Projects for delivering Government and private services at the doorstep of the citizen. Stat

Wide Area Networks (SWANs) are being established to extend data connectivity of 2 Mega bits per second up to the block level in the country. The Government has also approved a scheme, as part of NeGP, to establish 100,000 broadban enabled internet Common Services Centres (CSCs) in rural areas of the country to connect the citizens of rural India to the World Wide Web.

To foster all-round development in the Commonwealth fraternity, we had promoted the Commonwealth Action Programme for the Digital Divide (CAPDD). It is commendable that much work has been done within the Commonwealth to expan

the contribution of ICT to socio-economic and civic development. Despite progress in some areas, the full potential and promise for the Commonwealth in the area of ICT for all-round development remains largely unfulfilled. The need of th hour is proper coordination and alignment at the strategic level, a clear strategic direction to collaboration within and outside the Commonwealth, and the presence of a consistent, dedicated funding.

(Extracts from Indian Communications and Information Technology Minister's inaugural speech at the International e-Partnership Summit in New Delhi, held on March 23, 2007)

In the growth of telecom sector, the Indian cellular industry is playing a very significant role. Today, the number of mobile subscribers has exceeded the number of fixed line subscribers and continuing to grow, claims the Cellular Operato

Association of India (COAI). The industry has so far invested over Rs 60,000 crores in setting up 150 state-of-the-art cellular mobile networks serving about 4000 cities/towns and over 6000 villages spreading across the country. Of this networ 83 are of GSM which accounts for about 80 percent of mobile facility.

Meanwhile, COAI has welcomed Indian telecom regulator TRAI's recommendations on infrastructure sharing. COAI Director General T.V. Ramchandran maintains that there should be a Joint Working Group to take spot decisions with regard infrastructure in critical locations. This would address one of the main concerns of the industry with regard to provision of seamless services.

Referring to TRAI recommendation that the total amount charged per tower should not be more than 1.2 times the amount being charged from individual service providers Ramchandran says this would definitely make infrastructure sharing a extremely attractive proposition as all operators are looking at ways and means to reduce their costs.

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India: Cellular operators growth (As in March 2007) COMPANY 1 BSNL MTNL Hutch Reliance Aircel Spice BPL IDEA TOTAL Source: COAI 27.42 2.7 26.44 4.34 5.51 2.72 1.07 14.01 84.28 Subscribers (In mn) 19.00 16.00 10.00 14.00 19.00 14.00 1.00 7.00 100.00 GSM Market share (%) COMPANY 1 Bharati HFCL Infotel Reliance Comm Shyam Tele Subscribers (In mn) 1.87 0.31 25.18 0.24

Tata 16.55 Teleservice 1 1 1 TOTAL 1 1 1 44.18

However, commensurating the subscriber-base expansion, revenue growth has not been proportionate, so says COAI. Duties and levies are also very high, they maintain. This is impacting availability of resources to fund network expansion and growth to rural and uncovered areas. "This is one of the reasons why even today a very large portion of rural area is still uncovered and the benefits of the telecom services are yet to reach a vast majority of population" COAI told the government.

Objectives of the National Telecom Policy Make available affordable and effective communications for the citizens. Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas and the provision of high-level services capable of meeting the needs of the countrys economy. Encourage the development of telecommunication facilities in remote, hilly and tribal areas of the country. Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and thereby propel India into becoming an IT superpower.

Convert Public Call Offices (PCOs), wherever justified, into Public Teleinfo centres offering multimedia services like Intergrated Service Digital Network (ISDN) services, remote database access, government and community information systems etc. Transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players. Strengthen research and development (R&D) efforts in the country and provide an impetus to build world-class manufacturing capabilities. Achieve efficiency and transparency in spectrum management. Protect the defence and security interests of the country. Enable Indian telecom companies to become truly global players.

The ministry's report to the Parliamentary Committee also pointed out that "the robust telecom network has facilitated the expansion of BPO industry which is having five lakh employees now and adding 400 employees per day." This apart "Mobile telephone has now become the highest selling consumer good with about 30 million hand sets sold in 2005 displacing bicycles from the top slot". About one of the major concerns- providing service at an affordable price to the common man- the current tariff is "one of the lowest in the world now". Physical Performance of Telecom Sector (In lakh lines) Scheme Ninth Plan Achvnt Tenth Plan Targets 2002-03 Targets 2002-03 Achieve-ment 2003-04 Targets Achieve-ment 2004-05 Targets Anted. Achieve-ment 3 yrs. Anted Achieve-ment (in %) Tot. DELs 236.01 650.23 69.83 96.48 64.11 219.23 132.56 448.27 Fixed 96.89 25.03 23.32 14.00 -2.47 20.49 41.34 WLL 62.93 13.43 10.60 16.61 87.03 25.50 123.13 GSM 235.41 31.37 62.56 30.00 134.67 81.57 278.80 BSNL 218.86 367.67 64.34 47.70 60.61 34.60 100.00 182.30 Fixed 80.90 22.90 22.12 14.00 0.19 4.50 26.81 WLL 62.93 11.94 3.19 16.61 4.43 25.50 33.12 GSM 223.84 29.50 22.39 30.00 29.98 70.00 122.37 MTNL 17.15 27.56 5.49 2.38 3.50 -1.48 5.00 5.90 Fixed 15.99 2.13 1.20 -2.66 WLL 0.00 1.49 0.27 0.50 GSM 11.57 1.87 0.91 0.68 Private 255.00 0.00 46.40 0.00 186.11 27.56 260.07 Fixed 0.00 15.99 15.99 WLL 7.14 82.10 0.00 89.24 GSM 39.26 104.01 11.57 154.84 Tax 25.09 11.47 10.61 11.08 11.08 12.66 34.35 BSNL 23.05 10.05 10.11 10.58 10.58 10.58 31.27 MTNL 2.04 1.42 0.50 0.50 0.50 2.08 3.08 Microwave 87.35 5.00 8.08 2.00 2.00 2.00 12.08 Optical Fib 273.83 125.06 87.55 55.00 55.00 38.00 180.55 BSNL 76.06 75.81 35.00 35.00 18.00 128.81 MTNL 49.00 11.74 20.00 20.00 20.00 51.74 VPT 218860 18000.00 3944.00 3693.00 7130.00 2960.00 8060.00 14713.00 Mid Term Appraisal of Tenth Plan (2002-07)

The business friendly atmosphere , growing domestic market and cost-friendly service providers are making India more and more attractive to invest in IT and Telecom. In telecom 100 percent FDI is permitted whereas in telecom services sector the FDI ceiling has been raised to 74 percent from 49 per cent. A number of world IT leaders have already announced their India investment plan. Microsoft to invest $ 1.7 billion in a phased manner over four years; Intel to invest over $ 1 billion. CISCO is also planning to invest in India $ 1.1 billion including $ 750 million for an R&D Centre. During the last one and half years, all these major world players have announced investments in India to the extent of over US $ 18 billion (about Rs.80,000 crore). This reflects the investment friendly climate in India. FDI investments in Telecom and IT Sectors (Major Projects) in 20052006 Name Location Nature of Project Amount proposed to be invested Present status

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Ericsson

Jaipur

Telecom manufacturing

$ 50 million Inaugurated on (already invested) 11.3.05. Unit in operatio

Ericsson

Chennai

R&D facility, Global Service $ 100 million in first Delivery Centre and facility for phase manufacturing GSM Base Stations and Mobile Switching equipment

Announced the project at Jaipur on 11.3.05 and inaugurated on 25.02.2006. operation

Ericsson

Other than Tamil Nadu

-do-

$ 100 million in first Announced on phase (within 2 3 11.03.05. Under implementation. years)

Elcoteq

Bangalore

Telecom manufacturing

$ 100 million out of Inaugurated on which $ 18 million 11.04.05. Unit in already invested. operation

LG

Pune

Telecom manufacturing

$ 12 million

Unit in operation

Nokia

Chennai

Mobile handset manufacturing $ 200 million (with Announced on 06.04.05. 10,000 employees) Inaugurated on 11.03.06. Unit in operation

Nokia

Chennai

To set up Global Network Operation Centre for Customers in Asia Pacific Region, Europe, Middle East and Africa

Announced on 16.12.05. Inaugurated on 11.03.06. Unit in operation

Alcatel

Chennai

WiMax Centre etc.

$ 60 million

Inaugurated on 03.09.05. Unit in operation

Alcatel

Mankapur, U.P.

Technology transfer / revival of $ 10 million ITI

Manufacturing recommenced on 07.07.05. Unit in operation

Alcatel

Rae Bareli, U.P.

Technology transfer / revival of $ 10 million ITI

Manufacturing recommenced on 09.11.05. Unit in operation

Samsung

Manesar, Gurgaon, Haryana

Handset manufacturing

$ 15 million. Factory inaugurated on Expansion Plan of 07.03.06 Unit in $200 million during operation the next 3 years. $ 250 million (first phase in 5 years) Announed on 25.02.05. Unit in operation

EMC2

Bangalore

Storage Technology Software Development

Siemens

Chennai/Hyderabad/Kolkata

Telecom equipment manufacturing

$ 100 Million

Announced on 09.08.05.

Aspcomomp

Chennai

Hardware manufacturing

$ 70 million

Under implementation.

Flextronics

Chennai

Telecom Hardware manufacturing

$ 100 Million

Announced on 14.09.05. Under implementation.

CISCO

Chennai

NGN Lab at Chennai; $ 1.1 Billion Announced on e-Governance Networking inIT including $ 10 19.10.05. Under & Telecom across the nation million at Chennai. implementation. Investment in IT and Telecom sector across the nation. Public Private partnership for $ 3 billion Advanced Semiconductor (Rs.13,500 crores) Manufacturing with technology and equity from AMD Announced on 30.11.05. MOU signed with Andhra Pradesh Government.

SemIndia with AMD

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Intel Corporation

Bangalore / other areas to be identified

Research and Development centre at Bangalore, Marketing, Education and Community programmes (US $ 800 million) Intel Capital Fund for investment in Indian Technology companies

$ 1.06 billion (in 5 Announced on years) [This will be 05.12.05. Under in addition to the implementation current investment of $ 700 million] $ 250 million (Out of $ 1.06 billion) Launched on 05.12.05

Intel Corporation Intel Corporation Microsoft Corporation

Bangalore

Mumbai

Dedication of Intel's first 'Made --in India' platform for notebooks "Napa" R&D, Education, Governance and Productivity $ 1.7 billion (in 4 years)

Launched on 10.01.06

Announced on 07.12.05. Under implementation.

Microsoft Corporation Tessolve Services Pvt. Ltd. Hyderabad

Windows XP Starter Edition Multilingual Version ATMP facility in Fab City $ 200 million

Launched on 01.03.06. Announced on 27.02.06. Under implementation.

HonHai (FoxConn) Precision Industry Co. Ltd

Chennai

Manufacturing of mobile $ 110 million handsets and components and Electronic Hardware and related Services Inauguration of the factory for manufacture of Sub-10000 Computers Manufacturing of Motorola's first "Made in India" low cost GSM Phone Launch of low cost Computer $ 70 million

MoU to be signed

XenitisInfotech Hooghly, West Bengal Pvt. Ltd. Motorola Chennai

Inaugurated on 05.08.05. Unit in operation Released in Delhi on 22.12.05 Unit in operation Launched on 13.10.05

AMD

New Delhi

TOTAL (including other cases)

$ 10.30 billion (about Rs.45,000 crores)

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