6 in 2010 in the last few years robust growth in the

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Unformatted text preview: er: its contribution to the nation’s GDP is expected to increase from 2% in 2006 to an estimated 3.6% in 2010.* In the last few years, robust growth in the sector has been driven by several factors: ► • In India, the reduction in average revenue per user (ARPU) is mitigated by an increase in the subscriber base that contributes to healthy revenue growth. In addition, declining tariffs are made up by an increase in the minutes of usage. ► • Operators are reducing operating costs and hiving off infrastructure elements such as towers into separate entities, thus inviting significant investment. Passive infrastructure sharing has benefited the Indian mobile industry and its customers, reducing the cost burden of each operator and speeding the rollout of mobile services. • In the last three to five years, initiatives such as network cost optimization, outsourcing of non-core activities, as well as low-cost business models have improved operator returns at low ARPUs. On the regulatory front, the nodal body — the Telecom Regulatory Authority of India (TRAI) — mandated National Long Distance operators (NLD) to discontinue charging a monthly roaming rental fee and to cut roaming tariffs by over 50% in February 2007 — a move that led to tariff reduction, increased competitiveness and transparency as well as rationalization of excessive roaming costs. The spread of Telecom services in India between 2006 and 2008 was aided by a significant decrease in international call charges, reduction in interconnect * From Emerging to Surging - India Telecom: 2010, Ernst & Young report, page 22 8 India 2012: Telecom growth continues charges, introduction of feature-rich low cost handsets and the roll out of microprepaid and lifetime validity schemes. The Access Deficit Charge is being phased out in 2008, while a further reduction of license fees and a lowering of the Universal Service Obligation (USO) fund contribution by operators are also expected. There are positive enable...
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This document was uploaded on 03/03/2014.

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