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.