Immense business opportunities brewing in telecom sector

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By Srabani Sen

The Confederation of Indian Industry (CII) recently organised a two-day conclave on the multi-dimensional growth in the telecom domain, focussing on building information and infrastructure to fuel a telecom revolution. The conclave discussed the future challenges, business opportunities, and the need to exploit the advances in technology. Interestingly, some of the speakers explored the emerging technology trends, their applications, products and services, which can impact the telecom business.

Addressing the audience, Sanjay Kapoor, CEO, Bharti Airtel Ltd, India and South Asia, said, “The telecom industry’s growth has not only generated jobs in the country but has also brought scale and sustainability to small entrepreneurial activities in the country. Telecom equipment manufacturing in the country will also have a role to play in this growth.”

Despite being the second largest telecom market in the world, telecom equipment manufacturing in India is still to take off. Last fiscal year, the telecom equipment market in India grew by 18.6 per cent, with an overall revenue at Rs 1,368 billion. Among the various telecom equipment sub-categories, the enterprise equipment segment grew by 31 per cent to touch Rs 200 billion. The switch and router segments registered 92 per cent and 65 per cent growth, respectively. According to industry experts, this industry will continue to register robust growth after the roll out of 3G and broadband wireless services.

Yao Weimin, senior vice president, Huawei Tecommunication India Ltd, stressed that the industry can take up social responsibility activities in rural India. It can deliver essential services like tele-medicine and e-education with applications that will make a difference in the everyday life of people.

Dr Ashok Jhunjhunwala, IIT Chennai, pointed out that though broadband is in its nascent stage in India, companies in the telecom sector face stiff competition. He said that the current spectrum auction price is too high, which will slow down penetration to villages. “Ease of mergers and acquisitions for telecom operators is required as too much competition has brought down prices but is no more keeping businesses viable.”

Dr Jhunjhunwala suggested that we should enable an environment that allows operators to share already auctioned spectrum without additional resource mobilisation. He also highlighted the need to promote Indian products.

“The growth of the mobile telephone industry and overall industrial development is expected to fuel the demand for telecom equipment in India. The investment in the telecom sector during the 11th Five Year Plan (2007-2012) is projected at US$ 77 billion. The revenue from mobile phone manufacturing is expected to reach US$ 13 billion by 2011. So there is an excellent growth opportunity for telecom equipment manufacturers in India,” says Sajeev Nair, head of product management, Telecom Division, Matrix Comsec Pvt Ltd.

K Bala Chandran, chairman and managing director, ADC India Communications Ltd, emphasised that both copper and fibre needed to be used for the last mile connectivity. “One of the trends that the industry is witnessing is the opting for fibre over copper technologies. But today, both copper and fibre should be exploited for bandwidth capability,” he concluded.

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