Catching up with China on the telecom front

Written by P Raghavan | Updated: Dec 31 2009, 04:27am hrs
Two developments that will ring out Indias telecom achievements in 2009 is the rapid closing of two large spatial dividesone international and other national. While the accelerated growth of the mobile telephone networks, which helped India to rapidly close the large teledensity gap with China, is the major highlight at the international level, the important achievement on the national front has been the rapid narrowing of the urban- rural divide.

And both these are remarkable turnarounds, especially the catching up with China on the telecom front, which seemed like an impossibility. Just five years back, in 2005, China was adding five million mobile phones each month, while India had to settle for just half the numbers. But India has now edged up to not only close the gap, but also has overtaken China for the second consecutive year by adding about 60% more mobile phones than the Peoples Republic in the first 11 months of 2009.

Most recent numbers until November 2009 show that India has added 159 million new mobile phones in the January-November period of this year as compared with 97 million phones added by China. This is a significant improvement over Indias performance in 2008 when it ended up adding 113 million mobile against the 93 million by China during the year. And the monthly addition to the mobile network in India now stands at around 14 million per month, as opposed to just 8 million in China.

Trends over the last five years show that the total number of mobile phones has gone up from 76 million to 506 million, pushing up the India-China mobile phone ratios more than three-fold from 19% in 2005 to 69% in 2009. The sizeable addition to the mobile network has helped India catch up on teledensity. Three years back, Indias mobile teledensity, at 20.5%, was just half that of Chinas. And now the mobile teledensity in India has gone up to 43.2% which is just about ten percentage points below that of China. And the overall teledensity in India has shot up from 12.7% in March 06 to 37% March 09 and further to 46.3% in November 09.

Catching up with China is just one major achievements of the Indian telecom sector. Equally important is the giant strides India is making on extending the telecom network on the rural front. Most recent numbers show that rural teledensity has increased from 9.5% in March 2008 to 15.1% in March 2009 and it stood at 19.7% at the end of October 2009. Though it has still a long way to go before it can match the urban teledensity which now stands at 104.2%, the prospects are encouraging. The overall growth of the Indian telecom sector would now largely come from the rural sector and new value-added services.

But Indias gains on the mobile phone front has not been matched by the new generation services like broadband or the old age land lines. Numbers on broadband show that India will still have a long way to go before it can come anywhere close to China. While China has almost trebled the broadband network to 102 million subscribers over the last five years Indias broadband network is creeping up from 3.1 million in 2007 to 5.5 million in 2008 and further to 7.6 million in November 2009.

The scenario on the landline front is equally bad. Though the number of land line connections in China has declined by close to 50 million in the last three years, it was still a formidable 318 million in November 2009. In contrast, the number of landlines in India has started declining after it touched a peak level of 45.9 million in 2005 to touch 37.2 million in November 2009.