After Budget is Telecom Industry Going to Boom ?

STATE OF THE INDUSTRY

At end-January ’08, the wireless subscriber base stood at 242.4 million, making India the third-largest wireless market in the world after China and the US. The total telecom subscriber base stood at 281.6 million, indicating an overall teledensity of 24.63%. The wireless subscriber base is expected to touch 490 million by March-end ’12. The growth is expected to be driven by opportunities arising out of low penetration, rising incomes, everfalling handset costs and local tariffs. Currently, around seven players operate in each circle. The entry of new players is expected to intensify the alreadytight competition, resulting in declining tariffs and cost of subscription to subscribers.BUDGET IMPACTThe excise duty cut on wireless data card from 16% to nil is marginally positive, as the effective duty would reduce from 21.7% to 4%. This will help raise the penetration of wireless internet services. With an average handset priced at Rs 2,500, the 1% National Calamity Contingent duty would have a negligible impact. Cellular services’ penetration will thus not be affected.