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A price war is on in the cellular world. Whatever the final outcome, consumer will be the king.
Ever since the cellular industry was opened to the private sector in 1992, it has seen the initial euphoria, subsequent despair and then hope when revenue-sharing policy was introduced and finally consolidation and growth. Within a very short span of time, the industry has grown in technology, marketing and competitiveness at par with developed nations. The opening up of the market led to impressive growth in business, as private sector continued to spread its operations across the country, acquiring new licenses, raising enough funds and launching new services both in basic and cellular arena. Telecom services, especially cellular, witnessed further boom with the government allowing the entry of a fourth operator. If one analyses the performance of economic reforms in the country, perhaps telecom sector is the only sector where the policies were not only framed but also implemented and the result was for a jubilant, over four crore telecom customers to see.
However, with tough competition and developments in the limited mobility, the industry has faced challenges and generated appropriate responses. Industry observers say India's cellular market is showing definite signs of awakening from its many disappointments in recent years. However, on a somber note, the cellular industry in India has been handicapped from the very beginning by a flawed regulatory environment, which allowed the Department of Telecommunications (DoT) to dominate the industry, both in its role as a policy maker and licensor, as well as a national service provider. Despite subsequent modifications of its role, the establishment of the Telecom Regulatory Authority of India has always been a fantasy.
Over the last five years, private telecom companies have roped in nearly 4.3 million cellular customers. Private basic operators have managed just about 0.397 million subscribers. The number of mobile users in India grew 76 percent to 5.48 million in 2001, as the industry saw strong growth over the past two years, says the industry body, Cellular Operators Association of India (COAI). The industry added 2.37 million new subscribers during the year. The industry growth potential is immense. US-based Yankee Group (a technology research and strategic consulting company) is bullish on the cellular market growth. It says that the Indian cellular market will grow by 12 times the current size to 38.9 million subscribers in 2005, with mobile penetration rate growing from 0.3 percent in 2000 to 3.5 percent in 2005, with a strong CAGR of 65.84 percent. The fervent hope according to the Yankee group is that the remaining regulatory cobwebs get blown away and liberalization takes a firm hold in the Indian market.
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