Welcome Address by Mr. Rajeev Chandrasekhar, MP and President FICCI at the Panel Discussion on “Demystifying 3G and BWA : Future Strategies & Projections”

19 January, 2009, New Delhi

I would like to extend a very warm welcome to all of you to the ‘Panel Discussion on Demystifying 3G and BWA: Future Strategies & Projections’.

Much has been written and said about where Indian Telecom was just over a decade ago. Our country stood at the bottom of the pyramid in terms of telecom penetration and 2008 truly represents a watershed year in the history of Indian Telecom, when India's subscriber base topped 350 million users to make its network the second largest in the world.

As we are all aware, this significant achievement was made possible primarily by rapid proliferation of mobile telephony. Wireless subscriber base in India has grown at a CAGR of 63% in the last five years, driven by a declining total cost of ownership of a mobile subscription, in turn driven by a reasonably healthy model of competition amongst the service providers with occasional blips.

Some numbers - Out of total telephone subscribers of 363.95 million, the total number of wireless subscribers was 336.08 million at the end of November 2008. Even though urban teledensity has reached 75%, rural teledensity still remains at 13% and this provides a tremendous opportunity for further growth in the wireless industry. Telecommunication access to rural India is going to be the most important development since the Green Revolution. Growth of broadband in India continues to lag. With only 5.28 million Broadband subscribers at the end of November 2008, the challenge lies in achieving the target of 20 million broadband connections by 2010.

It is clear from the above that while many Indians are connected and are voice enabled – the challenges of doing the same for rural markets and ensuring more Indians are Internet enabled is far from done, and therefore, one of the primary objectives of introduction of 3G and BWA is to increase the penetration of internet and broadband as well as adoption of associated services – in a sense replicate the success of mobile telephony for voice by using mobile technologies to address the low high speed internet penetration.

There has been a considerable debate and discussion about licensing, auctions etc of the 3G licenses, but there hasn’t been enough information and discussion on the product, service and the markets for the same. That’s what today’s report from BDA and FICCI attempts to do. Put a spotlight on what is 3G and BWA.? What should be expected from these licenses and service providers to do for the consumer and the markets? Will these licenses truly open the market to innovation or will there be still some artificial administrative barriers, like prohibition of true VOIP on BWA with interconnectivity?

Unlike in past instances when the sector was opened up – when the consumers and markets had very little awareness in advance of what to expect, and therefore, in a sense, took what was given – this time around the awareness is high, expectations are high, consumers are well informed and the need at least for affordable Internet is very pronounced and real. This report by FICCI and BDA will serve to provide an operational on–the-ground view of 3G and BWA and is based on extensive Industry inputs. The report evaluates the various scenarios and establishes some of the challenges as we move to introduce these services.

Thus, it must be the Government’s, along with organizations like FICCI’s efforts to ensure that introduction of these new services is done in a way that builds on the current successes and enhances them further and at the same time address the dysfunctionalities in the areas of customer experience and regulation of competition that have crept in along the way over the last decade. Making sure that this new set of services are launched successfully will also serve to attract a fresh wave of investments into the sector which will also serve to spur the slowing domestic Economy.

In ending, I welcome you all again to this discussion on 3G and BWA and hope that you find it fruitful.

Thank you