Mobile user base in 2005 falls short of target by 24 mn

Despite record growth in the use of cellular phones over the last couple of months and an overall increase of 58.13 per cent in the subscriber base in the last calendar year, India's mobile users' population is well below projections.

The country finished 2005 with close to 76 million mobile users and a broadband base of 840,000 users, falling well short of its target of 100 million cellular and 3 million broadband subscribers by the end of the year.

In March 2003, the Telecom Regulatory Authority of India had set a target of 100 million mobile subscribers by December 2005.

Besides, the government's Broadband Policy, which was unveiled in 2004, had set a target of 3 million connections by last December.

More importantly, the country, which increased its mobile subscriber base by 27.91 million in 2005, will now have to grow at double this pace over the next two years to meet the government's target of 200 million users by 2007.

Additionally, the broadband base will have to register close to five times of the current growth rates to meet the Broadband Policy target of 10 million users by 2007.

Operators, however, remain optimistic. "The death of validity in the pre-paid segment has resulted in all major operators adding over a million customers in December. With the extension of these schemes to the post-paid category, 2006 will best the last year by a wide margin," explained a senior executive with a private operator.

"Our target for 2006 is to have 125 million users. The sector's growth is on course to meet the 2007 target," said TV Ramachandran, director-general, Cellular Operators' Association of India.

"The tenders for 60 million mobile lines will be out this month. These will be completely operational by 2007," added a BSNL executive.

"The upcoming OneIndia Policy, falling handset prices, increased competition in the long-distance sector and the government's plans for sharing the universal service obligation with private players for mobile services in rural areas will ensure continued growth," said an industry analyst.

This optimism though does not extend to broadband. Private players maintain that despite all-out efforts, broadband growth has been hampered by a lack of last-mile cable connectivity.

"The government's threat that last-mile copper connectivity will be unbundled if BSNL fails to meet stipulated targets is very hollow. They will never resort to this move and broadband growth will, therefore, continue to be slow," said a spokesperson of a leading private operator.