It is generally accepted that any in-crease in the teledensity leads to higher productivity and change in the lives of people. It also contributes to growth in GDP. It was estimated that Global System for Mobile communication (GSM) alone has contributed about Rs. 40,000 cr per annum to the GDP in 2005 and provided 4 million jobs.
Telephone customer base in India has been rising over the past few years and the teledensity has touched double figures to reach 11.43 at the end of 2005 as against 8.62 in 2004. The customer base has increased by 80% in the last three years. The total mobile subscriber base continues to grow aggressively and reached 75.9 million at the end of 2005 as against 48 million in 2004. Of the 27.9 million subscribers added to mobile services during 2005, 4.5 million were added in December alone. The total mobile customer base is expected to reach 235 million in the next five years.
With India having the highest number of people without mobile phones, the growth potential is enormous. With over a billion people and 6.5% cellular penetration, as against 30% in China, makes it one of the growing mobile phone markets as there is a lot of scope left for penetration. India is rated as the fastest growing wireless market in the world. Experts project that India is expected to have the third largest number of mobile customers after China and the US, by 2007.
To beat competition and pump up volumes, telecom companies are cutting down the charges sharply. The mobile tariffs have been declining steadily and were reduced by over 90% in the last seven years. Low mobile tariffs have been one of the factors responsible for growing teledensity. With just Rs. 1,000, a customer can stay connected for a lifetime with just two recharges per year. The demand for mobile services has increased due to the recent offer providing free incoming calls for a lifetime. A similar trend has also been seen in the fixed lines as well. Operators expect their subscriber base to increase through new offers.
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