Develop villages as knowledge centres: Planning Commision

NEW DELHI, INDIA: The next phase of telecom growth will be driven by broadband paradigm, said R.R Shah, Member Secretary, Planning Commission at a conference on 'Connecting the Next 500 Million: Telecom Roadmap for the 11th Five Year Plan 2007 - 12', organised by the Confederation of Indian Industry (CII).

The majority of the next 500 million customers in telecom will be in the rural areas, through rural connectivity. The approach to enable this will require the government to review the strategy pursued so far, and bring substantial change in policy framework followed, to enable the growth of the telecom industry during the next Plan period, said Shah. The government is planning to develop villages as knowledge centers, he said.

There is a whole set of need at the rural level which has to be converted into opportunity in which ICT will have a major role, Shah said. Local content has to be encouraged to implement e-governance applications and connect rural India for the overall inclusive growth, he added.

There will be substantial outlays in the next plan period for education and health. Rural connectivity, e-governance applications, e commerce, tele-medicine and e-education which are going to contribute to substantial growth of telecom industry in the next phase of inclusive development in the 11th Five Year Plan period up to 2012, Shah added.

Integrate telecom policy with national planning process

Sanjeev Aga, Chairman - CII National Committee on Telecom and Broadband and Managing Director, Idea Cellular Ltd, said that the telecom industry is facing the challenges of interconnectivity, as well as growth and expansion within the sector.

He emphasised on the need that the government should instill confidence of the telecom industry by planning standard policies for the sector. Aga suggested that the telecom policy should be integrated with the national planning process undertaken by the Planning Commision.

The next three years will be difficult for the telecom industry as telecom companies will enter different geographical and socio-economic regions to foster growth, Aga said. The cost of passive infrastructure is enormous and telecom companies should consider the infrastructural challenges in the rural areas, he added.

D. Shivakumar, VP and Managing Director, Nokia India Pvt. Ltd. said that the telecom sector in India has grown because of innovative schemes offered by Indian operators. Growing economy, consumer spend, consistency of policy framework, operator's innovation and affordable handset will enable the telecom sector to reach the target of 500 million connections by 2010, he added.

The telecom growth will bring prosperity in rural areas and push the productivity in all the sectors, Shivakumar noted. Affordability and availability of infrastructure will be key challenges for the telecom industry to reach the rural customer, he mentioned. The value-added services (VAS) industry is going to reach Rs. 77,823 crores in 2012, which would be around 25 percent of the mobile telephony market, informed Shivakumar.

Vikram Tiwathia, Chief Information Officer, CII, said that the emphasis on broadband technology and introduction of NGN technology will maneuver the telecom sector to next phase of growth. As recommendations for the growth of telecom industry on behalf of CII, he suggested spectrum availability, unbundling of copper local loop for enhancing broadband use, rationalisation of taxes, stable electricity supply and proper handling of e-waste components be attended to for the next phase of growth in the 2007-2012 FYP period.

Telecom as catalyst for new economy

The report "Telecom: Catalyzing the New Indian Economy" was released by R.R. Shah at the conference. The report, produced by Frost & Sullivan, examines the telecom growth in 11th Plan period. Specifically, the focus is on identifying challenges of reaching the 650 Million users by 2012, infrastructure and regulatory issues that need to be addressed.

The report is based on valuable inputs from across academia, policy makers, and business leaders across telecom and related industries.

Presenting the findings, Anand Rangachary, Managing Director, Frost & Sullivan, said that supportive policy environment, improving telecom infrastructure and growth in rural telephony are the key challenges for the telecom industry. He mentioned that the Indian telecom industry had contributed over Rs.1,05,287 to the Indian economy in 2006 and is expected to grow at a CAGR of 26.8 percent to reach Rs.3,44,921 crores by 2012.

Rangachary added that the telecom industry is going to provide direct employment to 2.8 million people, whereas 7 million people will get indirect employment, the report stated. E-agriculture will reduce procurement costs of farmers by 2.5 percent, which will result in an economic benefit of Rs. 6,100 crores, added Rangachary.