The Hindu : National : Mobile phone growth signals India's telecom maturity

Online edition of India's National Newspaper
Saturday, Oct 16, 2004

National

National

Mobile phone growth signals India's telecom maturity

By Anand Parthasarathy

BANGALORE, OCT. 15. October 16 marks an important milestone in India's 150 year-old telecom history. Sometime during the day, the number of mobile phones will exceed the number of fixed telephones.

Today, the mobile phones in use — just under 43.9 million — crept slowly on the number of fixed lines, which were about 10,000 more.

By Saturday, the mobile phone numbers would have surged ahead by almost half a lakh and will continue to grow at a rate that is at present over 10 times faster than the rate at which fixed lines are being added. Mobiles overtaking fixed lines is an inevitable consequence of the worldwide telecom trend and is generally perceived as an index of a mature industry and a technology-savvy nation.

In September alone, the mobile phone population in India grew by 1.85 million compared to 1.7 lakh new fixed lines. Indeed, the number of mobile users has been galloping month on month for at least 2 years now, starting at almost a million a month, fuelled by falling hand set prices and competition-driven usage rates.

While Bharti Cellular was the first mobile player to straddle most of the country with cellular technology based on the Global Services Mobile (GSM) technology, increasing liberalisation saw companies like Aircel, BPL, Hexacom, Hutch, Idea and Spice become household names on their own turfs. The public sector BSNL and MTNL entered the lists with affordable options exploiting the Wireless in Local Loop (WLL) technology for local users.

Pragmatic decision

The Government's pragmatic decision not to play favourites with competing technologies, but to encourage both GSM and the other option, Code Division Multiple Access (CDMA), fuelled the entry of players such as Reliance and Tata Indicom who carved out their own mobile markets.

In fact, the mobile technology of WLL was cleverly deployed to bring fixed phones to many customers for whom the `last mile' was for long, an unbridgeable gap.

The rapid expansion of mobile networks resulted in many interesting sociological side effects.

In the hilly Malappuram district of Kerala, wireless-backed Internet has been deployed in a people's participatory effort known as "Akshaya" to kick-start an ambitious e-literacy campaign. But in Malappuram town itself, driven purely by consumer self-interest, the total number of telephones — fixed and mobile — quickly exceeded the total population of 59,000, a phenomenon rarely seen any where in the world outside big metros.

The ubiquity of the mobile phones has seen ordinary Indians come up with many innovative uses for the new found connectivity: fishermen working off the Alappuzha coast discovered that the range of their handsets was good for a few kilometres off shore and quickly networked among themselves so that they could all benefit from the seasonal marine bounty known as "chakara." In Delhi, some enterprising youngsters pushed a handcart through crowded colonies offering a "chalta-phirtha PCO."

If fixed phone growth has been relatively slow, that is because the areas of operation have often been logistically challenging. Indeed the call for "rural telephony" notwithstanding, hardly any private operator has made a serious effort to take telecom to the villages and the onus has fallen on the public sector BSNL to bridge the so-called `digital divide.' In fact, official euphoria about the new high figure of a national tele-density of 8.1 (that means just over eight phones for every 100 persons) this month may be premature. The number hides the gross disparity between the penetration of telephones in towns and in villages — something like a factor of ten.

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