Airtel is committed to connect the remote corners in the country, reaching places where bridges, roads, trains and planes have not reached yet. Their commitment is being reflected in the rapid growth in rural telephony in the country. Airtels network already reaches more than three lakh villages in the country. In the next two years, it will substantially cover the balance of rural India. Accelerated penetration into the rural and semi urban areas will hold the key towards meeting governments target of reaching 500-million telecom customer mark by the year 2010.
Affordability will remain the primary driver for Indian telecom in the coming years, more so as the operators further explore the bottom of the pyramid. Telecom tariff in India is already the lowest in the world. While operators continue to revisit tariffs, trying to move from 2 cents per minute to 1 cent in the next couple of years, there will also be a significant shift in the level of customer focus and new product offerings. Infrastructure sharing will play a critical role in the sectors drive towards affordability for the customers and financial viability for the telcos, in the next phase of telecom expansion. This will gain further momentum with the various telcos merging their passive infrastructure into separate companies enabling them to derive economies of scale. The standalone telecom infrastructure companies, I believe, will help the Indian telecom story to reach the next level by facilitating a rapid rollout in the rural areas with low customer densities.
On the new products front, money transfer over the mobile and m-commerce are tipped to be the next best thing to happen after SMS and Hello Tunes. Airtel in partnership with the global money transfer major, Western Union, is soon to launch a pilot service. This would enable millions of Indians working abroad to easily transfer money to their families back in India via their mobile phones. The can actually transfer amounts as low as $100.
The Year 2007 being the Year of Broadband has seen the sector grow by over 30% from a customer base of 2.10 million in the previous year. In the coming years, the service experience of the consumer will go through distinct improvement, particularly in terms of diversification of the service portfolio. Airtel has recently launched 8 Mbps for its broadband customers and is gearing up to offer 16 Mbps in the near future. The expansion of the sector will be driven by new service introductions in the space of educational content, gaming, music and movies.
While the next year will see greater focus on low-end users, especially in the rural areas, simultaneous development will take place to take care of tech savvy users through introduction of new high end services that make communication a more fulfilling experience. The urban consumers desire for music, entertainment, sports, games etc. will be fulfilled through new service introductions. With the launch of DTH and IPTV, triple play will come into reality with telcos offering voice, data and video services to their consumers.
Impact of telecom on the economy however goes far beyond mere connectivity. This will be increasingly felt in the days to come. The industry will continue to have a distinct impact in terms of generating both direct and indirect employment opportunities for millions of youth in areas like manufacturing, telecom, BPOs, ancillaries, channel distribution, branding, infrastructure labor etc. The sector has the potential to nurture thousands of entrepreneurial initiatives across rural and urban India.
Overall, I see the Indian telecom market teaching new ways of working to operators globally and setting new business models and milestones that will become benchmarks. With a clear mission to put phones in the hands of a billion Indians, Airtel will lead India to outpace the US in becoming the second largest telecom market in the world, after China.
The writer is president and CEO, Bharti Airtel