Internet boom to boost investment in telecom
New Delhi, Mar 18
India's internet explosion is fuelling a massive restructuring of the national telecom network that is expected to attract 100 billion dollars of investment over the next 10 years`.
"Internet usage and electronic commerce will grow exponentially ... India is expected to be the fastest growing Internet market in Asia," N.K Goyal, president of Himachal Futuristic Communications Ltd (HFCL), said.
"This will spur investments in the Indian telecom sector making it the second largest market in the world with investments of 100 billion coming in over the next 10 years," Goyal said.
According to an HFCL survey, the number of Internet users in India will explode to two million by the end of 2000 from the current level of 600,000. India's telephone network has 20 million lines for a population of nearly one billion people.
"But the telecom boom should see the number of lines grow by 118.5 million telephone lines in 10 years," said the survey. The number of lines grew by an annual average of 16.5 percent for the five years to 1997.
But the survey says that in the last two years there has been an annual growth of 20 percent because of the convergence of telephony and information technology. However, some 2.4 million Indians are in the queue for a phone connection.
The findings of the telecom survey are echoed by the 520-member National Association of Software and Service Companies (Nasscom). "A strong nationwide telecom backbone is on its way because of the growing demands of the IT sector," said Dewang Mehta, executive director of Nasscom.
This telecom backbone is likely to serve up to one million subscribers by mid-2000 and strengthen the domestic Internet infrastructure. According to officials, the network to be built by the state-run telecom department would cost 20 million dollars and help private companies providing Internet services to connect customers to their network from anywhere in India.
Mehta said nine Indian states already planned to invest up to 900 million dollars each to set up their own telecom infrastructure networks. "Each of the state networks, estimated at 100 million dollars, will give plug-and-play facilities to all the villages through which the network passes," said Mehta.
Nasscom estimates that India's e-commerce transactions for the year ending March 31, 1999 were worth 1.4 billion rupees (33 million dollars). However, the study says that if the telephone network is strengthened and more people have computers, India could generate 1.5 billion dollars worth of business on the net in four years.
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