India wakes up to Chinese telephone alarm

BANGALORE: In a bid to catch up with China, India aims to double its number of monthly telephone connections and is setting new rules to encourage local manufacturing by telecoms multinationals.

Communications and Information Technology Minister Dayanidhi Maran said the main state-run telecoms firm had decided to stipulate that 20 percent of the value of the equipment used must be made in India.

This could lead to more local manufacturing by multinationals such as Nokia, Ericsson and Nortel, Maran said at the inauguration of a telecommunications research laboratory here.

India has about 105 million phone connections. Of this, mobile subscribers total about 58 million and account for most of the new connections.

Maran said China's telephone penetration level had reached 55 percent of its population and while India was adding about two million a month, the government aimed to double that rate.

The union minister said the country planned to add 150 million more connections in three years. "I am sure that by 2010, we should be reaching 500 million telephone connections. That's what we are aiming for," he said.

He said that state-owned Bharat Sanchar Nigam Ltd. (BSNL) was expected to award an order to build 40 million more lines, while the government would use funds from license fees to expand rural telephone coverage.

BSNL officials have said the size of the GSM-based mobile phone network order could be raised by half.

Maran said India's rural telephone penetration level of 1.7 percent was way below the 28 percent reached in urban areas.