India's Telecom Sector Gets Multi-Billion-Dollar Investment

Bharti and Ericsson invest $2.5 billion.

Indian phone giant Bharti and Swedish telecoms equipment maker Ericsson announced Jan. 18 investments totaling $2.5 billion in India's "phenomenally" fast-growing telephone market. Bharti Airtel, India's largest private phone company, invested $2 bllion in the financial year 2006-07 and "plans a similar investment in 2007-2008", mostly targeting rural areas, a Bharti spokesman said. Ericsson, meanwhile, said it would invest $500 million over the next five years in India -- and possibly more -- to exploit growth in the sector. "We will be investing $100 million annually for the next five years," Mats Granryd, managing director of Ericsson India, said on the sidelines of a conference in New Delhi.

The investment announcements came days after the Telecom Regulatory Authority of India said the total number of telephone subscribers in India had hit 189.9 million, of which 149.5 million were mobile customers. India added 6.48 million new mobile subscribers in December, making it one of the world's fastest-growing mobile markets.

"India's mobile subscriber base is increasing phenomenally every year -- one customer is added every second," Communications Minister Dayanidhi Maran said. "By 2010, India will have more than 500 million mobile subscribers from the current base," Maran has forecast.

Right now, India's mobile revolution is mainly confined to the cities, but the real prize for phone companies is the vast rural market where nearly 70% of India's 1.1 billion population lives, analysts say. Telephone penetration is around 25 per 100 people in urban areas, and as low as 1.6 per 100 in rural areas.

Copyright Agence France-Presse, 2007

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