Indian telecom sector clocking single digit growth due to high digital illiteracy rates : COAI

According to the industry body, 90% of Indians remain digitally illiterate, which is also a big reason for the telecom industry's declining revenues.

Published Date
31 - May - 2016
| Last Updated
31 - May - 2016
Indian telecom sector clocking single digit growth due to high di...

On Monday, the Cellular Operators Association of India released its annual report for 2015-2016 at the industry body’s annual general meeting held in New Delhi. The event saw Gopal Vittal, MD & CEO (India and South Asia) of Bharti Airtel take over as the Chairman of COAI from Himanshu Kapania, MD, Idea Cellular. Here, the apex body that represents leading mobile service operators also shared insights on ‘connecting the next billion’, during a round table conversation presided over by RS Sharma, Chairman, TRAI and Telecom Secretary, JS Deepak.

The event was kicked-off by Kampania sharing a medley of numbers revealing the sluggish growth of the telecom sector in the past year. He pointed out that a total investment of 1,40,000 Cr was made by the telecom sector in Fy 2015-16, but despite the high investments, last year, the telecom sector clocked a single digit growth of 6.6% for the first time in 4 years. Addressing various challenges in the industry, Kampania said “Let’s acknowledge the fact that there is a pressure.”

The stagnating voice business is one of the majour concerns for telcos in India. “We believe we are at a stage where industry is moving from purely voice to purely data,” claimed the Idea cellular MD. According to data shared by COAI, a total of 79 million new subscribers, 68 3G networks, 30 4G networks and 1,60,000 cellular sites were added by the telecom sector in 2015-16. Another 350,000-360,000 mobile sites are expected to come up in 2016-17. The industry also saw a massive adoption of smart, connected devices, which should have ideally pumped up revenues. Instead, data rates dropped by 20%, resulting in spiralling revenues for the industry.

Although lowered revenue does pose a threat to future infrastructure investments by the telecom sector, the biggest challenge of all remains the digital illiteracy rate in India. According to Kampania, 90% of Indians remain digitally illiterate. This means that 90% of the population in India does not have access to any medium of connectivity, be it smartphones or computers. The Telecom Secretary also acknowledged the problem of Digital illiteracy saying, “India is a nation of digital have-nots. Vast majority of India does not have connectivity.” He went on to add that the Government is working towards making 50% of the country’s rural houses digitally literate. He also pointed out that the Finance Minister has allocated funds in this year’s budget for the same. Although digital education for the rural remains a priority for the Government, Deepak said that the onus of spreading the same in urban areas lies with the private sector aka the telecom sector.

Kampania also mentioned Net Neutrality as one of the reasons for the industry's declining fortunes. “We have to expand the role of Net Neutrality,” he said. He also pointed out that the initial success of India’s telecom sector happened because of differential pricing in voice services, demanding that the rules for the same should be eased for data pricing as well.


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