Gartner predicts growth in telecom sector

MUMBAI: At the sidelines of the NASSCOM-Gartner Summit 2002, Gartner has predicted that telecom services worldwide would witness growth of over five percent in 2003 and India would be amongst those witnessing fastest growth till 2006.

The cellular market, which has been the frontrunner in the growth of the industry, would continue to grow at a CAGR 46 percent, making it the highest growth market in APAC, even ahead of China in percentage terms. The subscriber base currently pegged at eight million will grow to 44 million by 2006.






There would be entry of new players, which would not only lower the price points but will also help broaden the market with innovative product offerings and solutions. This was revealed by Kobita Desai, Senior Analyst, Telecom, Gartner





Basic services will continue to play a key role in increasing teledensity. Revenues from fixed telecommunication services would grow at a CAGR of 15 percent in the next five years from the current $ 6.9 billion to $14 billion.





The process of liberalization of Long Distance Service would increase the number of players, put competitive pressures on pricing thus bringing down tariffs and hence revenue per user. The market buoyancy though, would be maintained by the increasing use of WLL for ease of deployment of new lines, she maintained.





She added, "While the process of deregulation has set the pace for growth, a lot remains to be done to maintain the momentum. Lack of interconnection guidelines, cap on FDI at 49 percent, high percentage of revenue sharing towards license fees, spectrum charges, freedom of regulator, long gestation periods for resolving conflicts and lack of control mechanisms to combat anti competitive practices have been restraining the growth potential in this segment."





"The key to success is the role of the regulator to ensure best business practices in an independent and competitive marketplace and the influence of non market forces on regulatory practices, pricing and service provisioning" she said.





(CNS)