Report Reveals Unique Role Played By Mobile In India's Transformation
According to a GSMA commissioned report, India's mobile ecosystem generated approximately 5.3 percent of GDP for the country in 2012, directly supported 730,000 jobs and an additional two million jobs when points of sale and distributors are included.
The report further predicts that by 2020, mobile will contribute almost US$400 billion to India's GDP, create 4.1 million additional jobs and invest US$9 billion in India's infrastructure, with US$34 billion contributed to public funding.
India is already the second largest market in the world in terms of mobile connections and unique subscribers, with nearly 900 million mobile connections and 350 million subscribers. With improved spectrum pricing and management, growth of mobile broadband services is expected to continue, with 3G and 4G adoption projected to increase by 31 percent -- from 107 million 3G and 4G connections in 2013 to 409 million connections in 2017.
However, the Indian mobile industry still lags behind most major economies in terms of mobile maturity and penetration.
"The Indian mobile industry is fast-paced and innovative, but it currently lacks the regulatory environment to support its ambitions," said Anne Bouverot, Director General, GSMA. "An absence of predictable, long-term policies in areas such as the allocation of radio frequencies is acting as a brake on investment. The Indian government's target of increased rural coverage would be supported by a more flexible spectrum policy, particularly the release of more frequencies in the bands below 1 GHz and the development of allocation processes that do not focus solely on maximising short-term spectrum fees."
Barriers to Change and Key Policy Asks
The report calls on the government to work with the mobile industry to design policies and regulations that maximise long-term private sector investment. In order to invest, the industry needs clarity on the direction of the overall economic and regulatory environment that will be put in place to support this path.
Following international guidelines, the government is encouraged to allocate and release more harmonised spectrum in larger blocks, which will prevent unnecessary market fragmentation. However, at present, approximately 60 percent of the relevant spectrum is yet to be allocated and large blocks specifically identified for mobile are occupied by other sectors.
To increase the efficiency of spectrum use, the government is urged to clear the way for market-driven sharing and trading of spectrum resources. The government is also encouraged to adopt lower spectrum reserve prices. TRAI's recent proposal is a step in the right direction.
India has one of the world's highest universal service levies - five percent of operating revenues - which would benefit from a full review. The report states the government should focus on fostering public-private partnerships for the implementation of projects and seeking alternative funding sources, rather than constraining industry development with ineffective financial mechanisms, such as the USOF levy.
The recent regulation adopted by the Indian government goes beyond global standards, increases network costs and can reduce service quality. Best practice for radio frequency limits, based on International Commission on Non-Ionizing Radiation Protection (ICNIRP) and endorsed by the World Health Organization, should be followed instead.
"India is on the cusp of dramatic transformation, both economically and socially, through mobile," continued Bouverot. "The mobile industry is ready to work closely with government, as well as other adjacent industry sectors, to accelerate growth through mobile, increasing technological innovation in India and enhancing the lives of all its citizens."
The full report can be viewed here: http://www.gsma.com/mobileeconomyindia