India Phone Growth

December 9, 2005

I am in Phoenix today and as I woke up I came across this story about how India telecom growth is exploding. In fact a record 3.79 million new connections -- 3.51 million mobile phones and 280,000 fixed lines -- were sold last month.

The number of phone users in India increased to nearly 120 million at the end of November, or 11 percent of its 1 billion plus population, from 10 percent just three months earlier.

Phone usage languished below 4 percent until 2002, when a booming economy, falling prices and increasing competition fueled demand. India has emerged as one of the fastest growing phone markets in the world, with monthly sales of more than 3 million connections.

The Telecom Regulatory Authority of India or TRAI said 60,000 people subscribed to broadband during November, raising the total number of high-speed connections to 750,000, but still far short of the government's target of 3 million connections by December.

If anything the phone growth in India shows what happens when there is competition in the market. Telecom growth has increased almost 200% in just a few short years. Governments everywhere should see from India how their constituents benefit. Perhaps more importantly for politicians, the economy of countries with rapid phone growth also expand rapidly. Why? More spending on telecom services and the ability for citizens to transact with companies more easily.