The telecom superboom

There's an old tailor under a young tree near my house who barely manages two
square meals for his family. But he's now started 'marketing': passing around
his new mobile number to the neighbors. He's hoping for more business.

Further down, a versatile youngster variously begs, sells magazines, and
agarbatti at a traffic crossing. I've seen him hiding under a flyover, taking
calls on his mobile phone.

And there's a schoolkid from a middle class family nearby who upgraded to a
Nokia N73 after doing well in his 10th boards.

These folks, and 150 million others, have kept the Indian telecom market on a
roll. Telecom, for the past five years, is a “top three” vertical for IT. India
is a super-boom market for telecom equipment, which grew nearly 44 percent last
year to Rs 77,170 crore (nearly $18 billion), according to V&D100, our group
magazine Voice&Data's annual industry survey published in June and July.

A series of forces kept deployment growing faster. The consumer boom driven
by dropping prices; the consequent, massive, continuing expansion of
infrastructure; the emerging 3G and WiMax technology platform rollouts, the
spike in enterprise demand for bandwidth, pushed in turn by a range of apps from
videoconferencing to DR.

The growth is 40 percent or more across key equipment segments: carrier
equipment (over half the pie), handsets (nearly a third), enterprise equipment.
Ditto for broadband infrastructure, though that was just over one percent of the
pie.

The use of IT and telecom in retail, government investment in technology
apps, network re-engineering, and value-added services all fueled the enterprise
equipment market's growth. BPO drove the voice solutions market up 28 percent to
over Rs 1,400 crore, despite newer low-cost solutions. Network storage jumped 78
percent, to nearly Rs 1,000 crore.

We expect to see a similar growth story for services revenues, to be
published in the second V&D100 issue, in July. And this is a beginning.

Despite the consumer boom and the #3 mobiles market position, India has a
super-low mobile penetration, at just 12 percent. That leaves 88 percent of
nearly 1.3 billion people to be targeted...sooner or later. We've seen that
virtually no one is out of bounds for the mobile phone.

The enterprise story has just started: as Web-enabled apps proliferate, as
more and more collaborative apps link the supply chain, as e-Gov takes off, and
as banks and other organizations invest in DR: there will be unprecedented
growth in bandwidth demand in the next two years. And we're not even talking
about consumer broadband and SMBs.

Come hail or high water, the boom time is set to continue for telecom-and for
IT, which is so very linked to it.

Prasanto K Roy

(The author is Chief Editor of The DQ Week)