Dun & Bradstreet India, through its publication ‘Indian Telecom Industry’ under the D&B ‘Sectoral Round Table Conferences’ series, highlights the growth and performance of the telecom industry over the past few years. Over the years, the telecom industry has contributed significantly towards India’s economic as well as social development.

The publication has covered the following trends, which would be of particular interest:

• The size of the telecom industry in terms of subscriber base has grown by more than 5 times in a span of 5 years. The subscriber base has increased from 77.64 mn in FY04 to 429.72 mn in FY09, which can be largely attributed to the significant reduction in tariffs during the last few years on account of intense competition.
  
  
• A significant proportion of growth in the subscriber base was due to a surge in wireless communication. It is interesting to note that while the wireless subscriber base has registered an annual average growth of 63.89% between FY04-FY09, the wireline segment has seen a decline in its subscriber base from 40.02 mn in FY04 to 37.96 mn in FY09.

• Teledensity in India has also witnessed substantial improvement backed by robust growth in subscriber base. While the teledensity has improved substantially to 36.98% by end of FY09 from just above 2% in FY99, there still exists a huge digital divide between the urban and rural areas. On one hand the urban teledensity at 89% indicates a rapidly saturating urban market and on the other hand teledensity of less than 20% in rural areas points to a huge potential for growth in the telecom industry.
  
  
• Despite the Indian economy witnessing a significant slowdown in growth on account of the global economic crisis, the Indian telecom industry has shown resilient performance - with revenue growth of approximately 18% (y-o-y) during FY09.
  
  
• The subscriber base of internet services reached 13.5 mn on March 31, 2009, as compared to 0.09 mn in 1997, primarily driven by the rapid growth in subscriber base of the incumbent public sector. However, internet penetration in India is substantially lower than international standards. Limited fixed line coverage, low PC adoption, cost of operation and maintenance, low penetration in urban and rural population, service pricing and low computer literacy has affected internet penetration in India.
  
  
• The Indian telecom sector offers unprecedented opportunities in various areas, such as rural telephony, 3G, virtual private network, value-added services, et al. Nonetheless, the lack of telecom infrastructure in rural areas, lowering telecom tariffs, falling ARPU of telecom service providers, lack of telecom infrastructure in semi-rural and rural areas, could inhibit the future growth of the industry.