MUMBAI: The12th annual India & South Asia Com, a part of Com World Series, kicked off in Mumbai on Tuesday. Informa Telecoms & Media is hosting this event in association with the Cellular Operators Association of India (COAI).

According to Julie Rey, Informa Telecoms & Media's research director for Com World Series, 2009 has so far been a challenging year for the telecommunications sectors globally, but the Indian and South Asian markets have shown continued strength.

Addressing the meet, Cellular Operators Association of India's managing director, T V Ramachandran discussed key drivers for growth in India's telecommunications markets and its position in the region.

“India's telecom sector is growing at a fast rate in the world and about 75 per cent of new addition to the subscriber base prefers GSM connections and 93 per cent connections are pre-paid. And GSM technology is key driver in the growth of the telecom industry in the country,” said Ramachandran.

Talking about the significance of telecommunications, Ramachandran shared the finding of ICRIER report 'The impact of mobiles phones in India', and pointed that telecommunications is a critical building block for the country's economic development.

According to Ramachandran, India's telecom success and its future growth largely depends on factors such as the great rural push, youth segment, value-added services (VAS) and government policies such as 3G services and mobile number portability (MNP).

“We need to push out to rural areas and today about 50 per cent of new connections are rural and further expect to go up to 75-80 per cent in coming months. And as youths are more inclined to mobile phones and tech savvy, its a key growth driver,” he explained.

However, the growing subscriber base is encouraging for telecom industry growth, while the decreasing ARPUs are major worries for operators and service providers. Moreover, Ramachandran stressed on government policies and the need for spectrum reforms to get more priority for future growth. Also he pointed at the widening gap between the rural and urban subscriber base in India.

About industry challenges, Ramachandran remarked that there's huge burden of levies and duties in India compared to other countries, large accumulation of unutilized USO funds and the need for level playing fields for CDMA and GSM operators.

While, Sanjeev Aga, Idea Cellular's managing director stressed that in India and world over the telecom sector is confronting with one thing is the enormous epitome for investment.

“In coming 3-4 years, telcom will be among the top three sectors of India. But, behind such tremendous growth, there involves sheer amount of work, resources and operations for every company. From earnings and investment point, many operators have negative cash flows, return on investments and revenue earnings,” commented Aga.

Though rural penetration is driving the growth for the sector and transformational in economic development, it's very hard for operators as it involves high cost of operations and investments, he opined.

Sharing the government's stand, Siddhartha Behura, IAS, chairman Telecom Commission and Secretary, Department of Telecommunications said, “India's telecom sector is a great success story with tele-density of 38 per cent and still has lots of potential. About 30 billion US dollars worth investments was made in the sector last year as world is looking at South Asia and India for growth opportunities today.”

He said the Government of India is giving boost to the telecom sector.

“We are trying to vacate more spectrum from the defense and also have setup a spectrum committee in this direction,” explained Behura.

Moreover, he expressed confidence that the 3G would bring in better services for subscribers and healthy competition in the market , while the MNP will be highly beneficial to users as they have option for choose quality services.

About 100 odd business delegates and professionals from the telecommunication industry from India and South Asia and other countries remained present on the opening day of the event.