India’s Telecom Boom

The Economist writes about how the Indian market for phones is growing rapidly. “Mobile telephony is finally taking off in India. Some 5m new users have signed up since March; there are now over 17m subscribers. Add to this around 3.5m subscribers to a ‘limited’ mobile service provided by fixed-line operators that works within a restricted area, usually a large city, and the total is even more impressive. What is driving this spectacular growth? Affordability. Limited mobile providers, authorised to begin operations early this year, cross-subsidise mobile from their fixed-line services. This has led to such fierce price competition that Indian mobile telephony is now the cheapest in the world.”

Yesterday, in a sign of things to come perhaps, Reliance Infocomm acquired Flag Telecom for USD 207 million. This is the largest acquisition by any Indian company abroad in the services sector. “Flag Telecom is a leading provider of international wholesale network transport and communications services to carriers, internet service providers, content providers and other broadband operators. Its unique network spans four continents, connecting key markets in the Middle East, Asia, the USA and Europe. It owns and operates an underwater cable system, the longest man-made structure ever built, stretching almost 28,000 km from the UK to Japan. With 16 operational landing points in 13 countries.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.