Indias telecoms sector may attract about a billion dollars of foreign direct investment in the year ending March 2007 as global majors boost operations, Communications Minister Dayanidhi Maran said recently.

Maran who met top officials of global telecoms gear makers such as Nokia, Motorola and Alcatel at a recent 3GSM conference at Cannes said many global firms were positive about starting manufacturing in India.

Nokia and Elcoteq are planning to set up units in the country. If all the investments fructify then the foreign investment should be around $1 billion in 200607.

India, Asias fourth largest economy, has set a target of attracting $800 million in foreign investment in the year to March 2006.

A combination of low wireless penetration of just 5 users in 100 people and rockbottom call rates of about 2 to 3 US cents a minute have made India the fastest growing major mobile market in the world.

There are about 52 million wireless customers in India and the number is widely expected to cross 80 million by December 2005. About 2 million new mobile customers are entering the galloping sector each month.

 Much has been said about the booming Telecom sector in India. That India is the second largest telecom market in the world after China and that India has emerged, as one of the fastest growing markets, adding around two million fixedcummobile phones per month is what everybody knows. However, there havent been many reports giving the estimates of how much would the country need to flourish in this sector. Analysts say that telecom industry will require about $70 billion (Rs 1600 billion) in the next couple of years to achieve a target of 250 million subscribers by 200708 from the present 85 million.

Its been noted that there havent been any huge investments rushing in from the foreign countries. Reports say that only $2 billion have been invested in the Indian telecom even as the Indian government allowed 49 per cent FDI. Looking at this trend, analysts predict that there is no urgent need for the government to raise the FDI limit to 74 per cent. Speculations say that the influx of investments might not be phenomenal even if the FDI is raised.

They also suggest the telecos can achieve the target of achieving higher teledensity by procuring hardware and OSS/BSS systems designed, developed and manufactured locally so as to lower the acquisition cost, provide better service and ensure speedy upgradation. Public Sector Company Bharat Sanchar Nigam Limited has alone been striving all these years to increase the teledensity. According to industry sources, about $50 billion has been invested in the telecom infrastructure over the years with the stateowned Bharat Sanchar Nigam Ltd (BSNL) alone contributing $ 22.5 billion.

According to Gartner estimates the APAC region will surpass the European growth by 2008 with about $400 billion in revenues, next only to the US.

Govt needs Rs 300,000 cr for telecom

The Centre said it would require an investment of about Rs 300,000 crore for the equipment to roll out broadband services and 150 million new telephone lines over the next three years.

The total investment will be divided equally for broadband services and setting up new telephone lines, the Minister Of State For Communications And Information Technology Shakeel Ahmad said.

In the broadband policy the government has envisaged to achieve a target of 40 million Internet and 20 million broadband subscribers by 2010.

Speaking at the inaugral session of Convergence India 2005 Ahmad invited companies to set up more manufacturing facilities in the country in wake of huge growth in telecom subscriber base in the country.

Few companies like Nokia, LG, Alcatel and Elcoteq have shown interest to set up manufacturing bases here. But there is scope for more participation of the other leading industries as the demand is huge, Ahmad said.

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