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Speeding with the mobile

Getting from zero to a hundred million customers in ten years is a speed few products or services have attained. What the mobile telephone sector has recorded is even more commendable considering that the telecommunications arena has not seen things move with such despatch in a century-and-a-half. After a pioneering engineer, William O'Shaughnessey, demonstrated his experimental telegraph system near Calcutta in 1839 (two years after Samuel Morse did in the United States), it took 12 years for the British Raj to let him set up the first commercial telegraph line. It took over a hundred years for the number of telephone lines to reach 10 million. Even in the 1980s, an applicant needed to wait several years to get his wired telephone connection. Now it takes barely a day to get a mobile connection. And that is one significant reason why more than four million new mobiles log on each month. There may be questions about the accuracy of the 100 million figure; there are allegations that some service providers are exaggerating their subscriber base (by about six to 10 per cent) to secure additional frequency spectrum. But these questions do not, in any way, cloud assessment of a stellar performance.

Teledensity — the number of mobile and fixed telephone connections as a percentage of the population — which was just one in 1995, has multiplied to more than 13 this year. That may still leave it well below the Asian average of 23 and the Chinese figure of over 50 (with 416 million mobile subscribers), indicating the magnitude of the job ahead. But the portents are good for mobile telephony making rapid inroads into the rest of the population. The progressive liberalisation of the licensing regime over the past six years and the resulting keen competition among the six service providers have caused a dramatic and continuous fall in the cost of the handset and in the charges for its use — claimed now to be the lowest in the world — bringing the phone within reach of a wide section of society. It is not just the fall in price: cuts in fixed phones tariff have not helped stem the migration of subscribers to the mobile. The handiness of the device, its portability, versatility, and the overall value proposition it delivers have made it the winner. Yet is this formula good enough to get the phone population up to 250 million by 2007 and 500 million by 2010? Most of the increase needs to come on the back of a wider availability of the mobile signal across rural India. An imaginative use of the Universal Services Obligation fund, which has collected more than Rs.7,000 crore, can help expand the reach to parts of rural India that were considered too remote and thinly populated to be viable. One can envisage handset prices falling with domestic manufacture having begun. But usage charges will also need to drop further. A reduction in levies that add up to more than 20 per cent of the subscriber bill, versus less than four per cent in China, will be handy.

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