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Mobile economy to add $400bn to India GDP

Posted: 25 Oct 2013     Print Version  Bookmark and Share

Keywords:mobile  GDP  GSMA  subscribers  spectrum 

In 2012, the mobile ecosystem generated approximately 5.3 per cent of GDP for India, directly supported 730,000 jobs and an additional 20 lakh jobs when points of sale and distributors are included, revealed The GSMA in its report "Mobile Economy India 2013."

By 2020, mobile will contribute almost Rs.25.16 lakh crore ($400 billion) to India's GDP, create 41 lakh additional jobs and invest Rs.56,603.77 crore ($9 billion) in India's infrastructure, with Rs.2.14 lakh crore ($34 billion) contributed to public funding, the report claims.

"India is already the second largest market in the world in terms of mobile connections and unique subscribers, with nearly 90 crore mobile connections and 35 crore 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 per cent – from 10.7 crore 3G and 4G connections in 2013 to 40.90 crore connections in 2017," GSMA said.

However, the Indian mobile industry still lags behind most major economies in terms of mobile maturity and penetration, feels the association.

"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 1GHz and the development of allocation processes that do not focus solely on maximising short-term spectrum fees."

The report said India's regulatory environment does not allow the mobile sector to deliver its full potential. Network infrastructure investment in India is being held back by government policies that drain investment capacity from the sector, for example, by imposing high universal service fees.

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. It identified three regulatory policy areas that require particular attention: Spectrum Management, Universal Service Obligation Fund (USOF) Levy, and Balanced and Evidence-Based Radio Frequency Emissions Requirements.

"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."

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