India's telecom sector sees remarkable growth in last 3 years

India's telecommunication sector has grown remarkably over the last three years, according to a review report issued in New Delhi Friday by Indian Ministry of Communications and Information Technology.

The report said the telecom sector has been one of the key sectors contributing to Indian economy's impressive performance.

The sector has been growing in the range of 20 to 40 percent during the last three years, said the report.

The number of telephones grew from 77.94 million in May 2004 to over 120.67 million in November 2005, posting a growth rate of 54. 82 percent during the period.

Also, teledensity reached 10.87 percent from 7.15 percent on May 2004. Simultaneously, the share of private sector has also been continuously growing to 53.54 percent as of Nov. 30, 2005 from 40.21 percent in May 2004.

During this period to date, a total of 42.73 million phones have been added out of which about 77.84 percent or 33.26 million phones have been provided by the private sector.

The Government has decided to raise the foreign direct investment (FDI) ceiling from 49 percent to 74 percent in certain services such as basic, cellular, unified access services, the report said.

The total 74 percent FDI ceiling will include direct and indirect foreign holding in the licensee company.

Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunication, has provided excellent opportunities to both domestic and foreign investors in the manufacturing sector, the review report said.

Global leading companies like Ericsson, Alcatel, Elcoteq, LG have already set up their manufacturing bases in India. Nokia is also setting up an integrated manufacturing facility near Chennai with an investment of 150 million US dollars.

Flextronic Siemens, Motorola, Foxcon and Aspcomomp are also firming up their investment plan.

With these initiatives, telecom-equipment manufacturing sector is expected to attract about 855 million US dollars in the next one to two years.

Thanks to these initiatives, India is expected to become a manufacturing hub for telecom equipment, the report added.

Source: Xinhua