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The
targeted growth of 250 million by the end of 2007 has
been achieved in the month of October 2007. The total
number of telephones has increased from 76.53 million
on March 31, 2004, to 272.88 million on December 31,
2007. While 63.8 million telephone connections were
added during the 12 months of 2006-07, more than 7
million telephone connections are being added every
month during the current fiscal year. The tele-density
has also increased from 12.7 per cent in March 2006 to
23.9 per cent in December 2007. Rural tele-density has
increased to 7.9 per cent with 63.68 million rural
telephone connections whereas urban tele-density was
60.04 per cent at the end of November 2007.
The
liberalization efforts of the Government are evident in
the growing share of private sector in total telephone
connections, which has increased from 39.2 per cent in
2004 to 72.4 per cent in December 2007. The growth of
wireless services, in particular, has been phenomenal,
with number of wireless subscribers growing at a
compound annual growth rate (CAGR) of 87.7 per cent per
annum since 2003. Today, the wireless subscribers are
not only much more than the fixed subscribers in the
country, but also increasing at a much faster pace. The
share of wireless phones has increased from 24.3 per
cent in March 2003 to 85.6 per cent in December 2007.
As
a result of the rapid growth in telephones, the telecom
tariffs, which were among the highest in the world less
than four years ago, have now dipped to being among the
lowest. The National Long Distance (NLD) tariffs that
ranged between Rs. 1.20 and Rs. 4.80 per minute in 2003
for different distances are now as low as Re. 1 per
minute under One India Plan from March 1, 2006.
Similarly, tariff rates for International Long Distance
(ILD) have shown a significant decline. For instance,
tariff rates for an ILD call were Rs. 7.20 per minute
for U.K.; Rs. 9.60 per minute for Europe (other than
U.K.), U.S. and Canada; and Rs. 24 per minute for some
of the Middle East countries in 2003. From November 1,
2006, the tariffs have declined to Rs. 6 per minute for
U.K., U.S. & Canada and Rs. 8 per minute for Europe
(other than U.K.) and Middle East countries like
Kuwait, Bahrain, UAE, Oman & Qatar.
Foreign
direct investment (FDI) is an important source to meet
the demand for funds that are required for rapid
network expansion. The FDI policy provides an
investor-friendly environment for the growth of the
telecom sector. The total FDI equity inflows in the
telecom sector from August 1991 up to July 2007 have
been Rs. 20,718 crore which is 8.1 per cent of the
total FDI equity inflows into India during the period.
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