Statements, Speeches, Interviews

Speech 'Spectrum for Mobile Broadband in India'

Speech 'Spectrum for Mobile Broadband in India'
Verdi Room, Fira Palace Hotel
3GSM World Congress
February 15, 2011
(1135 - 1300 hrs)

Distinguished Delegates,
Ladies and Gentlemen,

It is my pleasure to be in this wonderful city of Barcelona, and I am extremely grateful for the hospitality that I have received here. It is my privilege to stand before this esteemed gathering as a representative of the Government and that of the people of India.

The Indian economy, with a consistent growth of 8-9% in recent years, is witnessing expansion in many sectors. The Telecom sector stands out with nearly 750 million mobile subscribers. The national teledensity is now touching 66%. This highly entrepreneurial sector has not only helped us buck the global recessionary trends, but is also continuing to add nearly 15-20 million new mobile subscribers every month. This is unprecedented.

This sector attracted over 20 billion dollars in investments in just two years, 2008 and 2009. The call rates have tumbled 10 fold in the last 10 years. Thus, it is not surprising that the world is looking towards India, for growth, for spotting the next trends in mobile telephony, and for breeding new ideas in the field. Many CEOs and leaders I have met here have echoed this sentiment.

While India's urban teledensity of nearly 150 percent compares with the developed world, rural teledensity too has shown remarkable progress rising to 32 percent from around 2 percent just five years ago. Although we are keen to narrow the urban-rural differential, we realize that real Telecom growth is not just about clocking subscriber numbers. Therefore, we are not just focusing on mobile phones for voice communication, but are crafting a development strategy that uses mobile technology to deliver services to citizens, to ensure that digital inclusion leads to financial equity and social empowerment.

As many of you know, given the size and scope of India, India is not one homogenous market, but many markets stitched into one. While our urban markets today demand sophisticated value added services, rural populations are still focused on voice and text. But in the future, these rural and remote markets will offer a huge opportunity to deliver medical, educational, and entertainment services through communication technologies. I therefore see both our urban and rural areas requiring a great deal of bandwidth.

India's diversity is reflected even in the choice of mobile devices and services. Consumers are buying both low end devices that cost as little as $25 to high end smart phones. This offers commercial opportunities for providers who are willing to devote their creative energies and resources to create affordable local devices, content, and applications.

We are now looking to combine the advantages of mobile phones, broadband, and unique identification numbers for every citizen to deliver services. Using mobile phones as authentication devices, governments and businesses will be able to target customers without the need for traditional infrastructure. In particular, financial services to the poor will be critical. Right now, only about 15-20 percent of Indians have bank accounts. I see a future where all Indian citizens can access financial products and services through a safe and affordable combination of ICT and mobile technologies.

Even as broadband connections have increased rapidly, recently crossing the 10 million mark, the overall broadband penetration in India remains unjustifiably low at below 1%. With the introduction and implementation of Broadband Wireless Access (BWA), we expect higher growth rates in this segment too. The government is committed to expanding connectivity to the remotest corners of the country, and is therefore investing heavily in scaling up telecommunications infrastructure across the nation.

The success of the telecommunications sector in India is the result of extensive efforts of the Government and the industry. The Government is focused on telecom reforms, including enhanced transparency and deliberations with all stakeholders. This, coupled with the continuing efforts of the industry, are preparing the sector for the future. Recently, we have announced a 100 day plan for the IT & Telecom sector.

Under this plan, we are addressing issues related to licensing, spectrum allocation, tariffs & pricing, flexibility within licences, spectrum sharing, spectrum trading and, M&A. We want to consult key stakeholders to evolve a clear and transparent telecom regime. The new telecom policy is being developed keeping in mind concerns about affordable services for users, robust growth of the industry, and reasonable revenue for the government.

Some of the changes that are being introduced include the de-linking of spectrum from licences - licences will not be bundled with spectrum, and operators will pay a market price for additional spectrum - this is in line with our efforts to make this process transparent and market driven. Licenses will be of the nature of 'unified licence' and holders will be free to offer any combination of possible telecom services.

The progressive policies adopted by India have benefited both consumers and telecom companies. With their vast experience in the highly competitive Indian landscape, Indian telecom companies are diversifying their product offerings and venturing into foreign markets. They are also collaborating with global companies to expand in new geographies. This is also a sign of the growing confidence among Indian companies that are aspiring to set global benchmarks.

Under India's National Broadband Plan, the government plans to build an open access Optical Fibre Network connecting all habitations with a population of 500 and more. This will connect 160 million Indian households with high-speed Internet connections by 2014. The Telecom regulator in India has recommended that download speed of up to 10 Mbps may be provided in metros and large cities.

Recently, the government conducted a very successful auction of 3G & BWA spectrum. 3G services are now in the process of being launched across the country. Composition and the potential of the Indian market is resulting in offers of 3G products and services that already match, or will soon match, 2G prices. In line with our commitment to enhance consumer choice and ensure quality of service through market mechanisms, we have recently introduced Mobile Number Portability. Customers can now change their telecom provider while retaining their original number.

BWA rollout will also supplement the aggressive growth that the telecommunications industry has witnessed in recent years. Our Government is sensitive to genuine requirements of additional spectrum and is taking steps to ensure adequate spectrum availability. We would continue to press for efficient usage of this precious national resource. The Indian government has adopted the position of "technology neutrality" when it comes to BWA as we wish to allow service providers the flexibility to choose the best technology suited to their needs, and letting the market and the users pick the winners.

India's advancement in the telecommunications sector comes on the back of a strong domestic demand. This has also provided a stimulus to the domestic telecom manufacturing sector. Government organizations are also engaged in R&D for developing the next generation of products and services. We are actively looking at mechanisms to reduce the cost barriers for domestic manufacturers to make them more competitive.

The priority of the Indian government is to connect every Indian to the world, and the effort involved in doing so is on a scale that has never been undertaken before. We want our citizens to be able to remotely access basic facilities like health, education, banking, commerce, entertainment, utility and e-governance services to enhance their quality of life. India is very committed to its comprehensive e-governance programme.

Our national e-governance programme is an ambitious endeavour. Under this, we are setting up 100,000 Common Service Centres (CSCs) across India to take essential services to the doorsteps of every citizen. Nearly 90,000 of these centres have already been rolled out, and they are providing access to nearly 100 types of public and private services. In addition, these centres are providing job opportunities to many in rural India.

Another critical initiative in leveraging technology to improve governance is improving rural broadband connectivity. In India, Village Headquarters are the most basic units of administration. By 2012, we will have connected all the 250,000 Village Headquarters with high speed broadband. Nearly 100,000 of these are already connected, and we are pursuing the rest on a war footing.

There is also the recognition that mere connectivity may not be enough. We must simultaneously develop applications relevant to India's needs and aspirations, especially as nearly half of our population still lives in rural parts. An entire ecosystem of supporting infrastructure is needed - this includes devices that work in the tougher physical environments of remote areas and can deliver content in the local language. Even though India has a very large talent pool, we need skilled human resources which are a magnitude greater than what we have today.

In India, where PC penetration in homes is still low, mobile phones are allowing many to have constant access to the Internet. While Internet use in urban areas may be dominated by corporate applications and social networking sites, there is a heavy demand for audio video content delivered through broadband in rural areas. This wide variety of needs is as much of a policy challenge as it is a business complexity.

The mobile phone and internet revolution is also reaching Tier 2 and Tier 3 cities in India. As urban markets become saturated, these cities are providing new growth opportunities for telecom companies. With improved connectivity, it is the smaller cities and smaller urban settlements that are quickly becoming the choice of site for new business ventures. This is where investors are likely to see some of the biggest gains in the near future.

Urban markets too are changing in their nature. Moving on from basic voice services and relatively slow Internet connections, urban residents are gearing up for high speed connectivity, multi-function mobile devices, and tablets. Large institutions and organizations are looking to sophisticated IT and telecom needs. Online gaming, live streaming of video content, and e-learning applications, are becoming more popular amongst the urban youth.

The Indian Government and the Ministry of IT & Communications are committed to making the vision of 'Connectivity for All' a reality and look forward to working with all of you to make this happen. In India, we are actively pursuing options that enable a more efficient allocation of spectrum. Given that spectrum is a limited commodity, much like any scarce resource, it needs to be utilized keeping the growing needs of India in mind. Therefore, the Indian government is exploring ways of re-balancing current spectrum availability, especially in cases where spectrum is not being put to optimal use.

The New Telecom Policy will also address this issue. I would also urge the Telecom companies to ensure that they price their services to different segments of consumers based on market determined mechanisms. Such granularity will enable them to extract maximum value from the spectrum and satisfy the largest number of consumers.

From what I have outlined this morning, you would have got a sense of the intent and efforts of the Indian Government to pursue a positive business and policy environment, where legislation and regulations are predictable, stable, and prove to be a win win for all. In India, we have the enormous task of charting a road map for Broadband availability for one sixth of humanity and our collective efforts should ensure that we can bring about a transformational change in the lives of those who have so far been left out of the ambit of connectivity and digital inclusion.

We welcome innovators and technology firms to come and invest aggressively. I am confident because a number of factors have come together to provide an unprecedented opportunity for investors who have already invested in India and those who are looking to do so in the time to come.

There is little disagreement that India's economy will continue to grow at the rate of 8-9 percent in the near future. This, combined with a 300 million strong middle class and nearly two-third of our population less than 35 years of age, presents an exciting business opportunity for investors in the telecom space.

The vision that India has for its telecom sector is full of challenges and opportunities. I want to underscore our government's commitment for growth of the industry, for leveraging it to deliver benefits across our wide economic and social spectrum, and for working with all stakeholders to resolve all outstanding issues in the spirit of discussion and cooperation. The telecommunications sector is critical to India's growth, grassroots development, and inclusive growth. I invite all of you to become a part of this magnificent story.

Thank you for listening to me. I hope to interact with many of you in the future. Thank you.