Mobile economy to add $400 billion to India GDP: GSMA

Mobile ecosystem generated approximately 5.3% of GDP for India, directly supported 7,30,000 jobs in 2012

The mobile phone industry in India is likely to contribute $400 billion or about Rs 216 lakh crore to the country’s gross domestic product (GDP) and has the potential to generate about 4.1 million additional jobs by 2020, Anne Bouverot, director general of the Groupe Speciale Mobile Association (GSMA), said here, on Wednesday.

GSMA, which is the global association for mobile companies, today released an India specific report ‘Mobile Economy India 2013’, in association with the Boston Consulting Group.

According to the report, the mobile ecosystem generated approximately 5.3% of the GDP for India, directly supported 730,000 jobs in 2012.

However, Bouverot added that the regulatory environment in India is detrimental to the growth of the industry. “The Indian mobile industry is fast-paced and innovative, but it currently lacks the regulatory environment to support its ambitions. An absence of predictable, long-term policies in areas such as the allocation of radio frequencies is acting as a brake on investment,” she added.

Bouverot also said availability of spectrum is also very low in India. Given India’s population density, there should be more spectrum available, she added.

On Universal Service Obligation Fund (USOF), the report noted India has one of the world’s highest USOF at about five% of operating revenues of telcos. “The government should look at public-private-partnership or the implementation of projects and seeking alternative funding sources, rather than constraining industry development with ineffective financial mechanisms, said Bouverot.