Challenges and Growth of Indian Telecom Sector

India has emerged as one of the youngest and fastest growing economies in the world today. One of the sectors that has shown the signs of profitability and contributed significantly to the country's economy is the telecom industry. In fact, the Indian telecom market has gained recognition as one of the most lucrative markets globally. The vast rural market holds a huge potential to drive the future growth of the telecom companies. Further, the government's initiatives for increasing the telecom connectivity in rural areas are also likely to aid the telecom service providers to extend their services in the unconnected rural areas. The Indian Telecommunications network with 621 million connections (as on March 2010) is the third largest in the world. The sector is growing at a speed of 45% during the recent years. This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provides easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. Presently, all the telecom services have been opened for private participation. The paper examines the changing landscape of telecom sector in the terms of challenges and opportunities. The Indian mobile subscriber base is likely to sustain the rapid growth recorded in the past few years. Presence of skilled labour pool, improving telecom infrastructure, favourable demographics, rising disposable incomes of consumers, declining tariffs, increasing demand, growing attraction for mobiles with new features and greater availability of handsets at lower prices, are expected to continue driving the growth of the telecom sector, going forward. The growth of India as a knowledge based economy will not be possible without the growth and expansion of the Indian telecommunications and IT sectors. This symbiotic relationship is not lost on the government which has attempted to back the telecommunications sector by fostering an encouraging regulatory scenario. This has not only helped the telecommunications sector to evolve in a dynamic manner but has enabled it to attract foreign investments. Telecom spectrum is a scarce resource and with so many scams happening right under the government’s nose, it is no surprise that the situation looks quite grim. But despite all the hiccups, the future is fresh with promise as each day; the mobile is finding more acceptances and becoming an inevitable part of our lives. Perhaps, that is a single shimmer of hope that is keeping the sector going. The area which needs immediate attention is the need for flexibility in the regulatory mechanism. The telecom legislation at present seems to be archaic laws and the need of the industry right now is a mechanism that can continuously adapt itself to the changing needs of the industry. There is no doubt at all that the coming years are going to be exciting years for the Indian telecom sector