September 23, 2003

One Telephone for Every Fifteen People

I don't know whether to be appalled that there are only 60 million telephones in India, amazed that there are as many as 60 million telephones in India, or astonished that India is adding phones at a rate of 20 million a year:

Reuters--New Delhi, September 12: The Telecom Regulatory Authority of India (TRAI) said in a statement it expects the country's phone user base to cross 70 million by March as more people take advantage of some of the world's lowest tariffs. Combined additions of cellular, wireless in local loop (WLL) and fixed-line connections were 1.9 million in August, the regulator said in a statement released late on Thursday.

"If a similar growth trend is maintained during the year, the total addition to the subscriber base is projected to exceed 20 million, taking the gross subscribers base of cellular and basic services beyond 70 million by end of fiscal year 2003-04," the statement said. More than a dozen telecoms firms, both private and state-run, compete for a slice of the country's booming telecoms sector. India has more than 40 million fixed-line customers, 17.4 million users of cellular services and the base for wireless in local loop mobility facilities exceeds 4.5 million...

Posted by DeLong at September 23, 2003 06:21 PM | TrackBack

Comments

Or take China, which has about 245 million fixed lines and 244 million mobile phones as of the end of August, and is adding about 50 million of each every year.

Posted by: Greyford Galaxie on September 24, 2003 12:16 AM

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Or take China, which has about 245 million fixed lines and 244 million mobile phones as of the end of August, and is adding about 50 million of each every year.

Posted by: Greyford Galaxie on September 24, 2003 12:18 AM

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Yep, but the big question is how the advent of wireless communication is changing the panorama.

Posted by: Edward Hugh on September 24, 2003 02:34 AM

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The last time I checked, long-distance calls from the U. S. to India were about an order of magnitude more expensive than to any but a very few other countries in the world. So perhaps there is a revenue stream that is being used to subsidize infrastructure development?

Posted by: Frank Wilhoit on September 24, 2003 05:24 AM

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Phone service, and especially cellular phone service, is exploding all over the world. Clay Shirky wrote an article last year critiquing the phrase "half the world has never made a phone call" which is interesting reading; he says that the statement might have been true when it was made in 1994, but is probably not true today (and, in fact, the person who said it predicted that).

Actually, Shirky doesn't consider the possibility that the number who have made a phone call was really much lower than half in 1994. But his basic point is that this is not a Terrible Thing Nobody Is Addressing, as the phrase implies, but something that is changing at an astonishing rate.

(I don't buy the sentence tying this to Virginia Postrel's ideology; the people repeating this aren't "stasists", they're just the kind of people who repeat legends that support their points. It's hard to stick Michael Moore, Kofi Annan, and Newt Gingrich into the same pigeonhole unless it's pretty broad.)

Posted by: Matthew McIrvin on September 24, 2003 06:03 AM

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Link didn't work-- here it is:

http://shirky.com/writings/half_the_world.html

Posted by: Matthew McIrvin on September 24, 2003 06:04 AM

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let us do some back of the envelope stuff:

Population of India: 900 mln (give or take)
Average Family size: between 4 and 5, say, 4.5
Number of 'families': 200 mln

Now, in India, families have land lines. very few have two lines which sets up a total 'land line' market of about 200 million lines.

If 40 million existing land line customers means about one-fifth of *all* families in India (including ones in the remote villages) have a phone at home.

Basically we have a three tier system of phone penetration: practically everyone in the cities has a land line (I suspect business lines are a relatively small part, but I am not sure how to reasonably estimate these). In the suburbs, most people have phones and in the villages, few people have phones.

i expect cell phone use in india to explode, especially in the villages where it is a lot cheaper to put up repeaters than it is to lay cable.

Posted by: Suresh Krishnamoorthy on September 24, 2003 08:02 AM

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> The last time I checked, long-distance calls from the U. S. to India were about an order of magnitude more expensive than to any but a very few other countries in the world.

But you'll find plenty of South-Asian-owned stores in the US selling phonecards or offering phonebooths at a fraction of the networks' baseline prices.

Ten years ago, a five minute phonecall from Nepal cost 10. How things change.

Posted by: nick sweeney on September 24, 2003 09:08 AM

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nick is correct. Today, I can buy a prepaid 45 minute phonecard to major indian cities for 4.95

Posted by: Suresh Krishnamoorthy on September 24, 2003 10:22 AM

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nick is correct. Today, I can buy a prepaid 45 minute phonecard to major indian cities for 4.95

Posted by: Suresh Krishnamoorthy on September 24, 2003 10:25 AM

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nick is correct. Today, I can buy a prepaid 45 minute phonecard to major indian cities for 4.95

Posted by: Suresh Krishnamoorthy on September 24, 2003 10:25 AM

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nick is correct. Today, I can buy a prepaid 45 minute phonecard to major indian cities for 4.95

Posted by: Suresh Krishnamoorthy on September 24, 2003 10:28 AM

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Actually, PCOs probably goes a long way towards explaining the low penetration of land lines in India.

A very large chunk of India (specially rural India) depended on basic service providers (called PCOs) who resold lond distance call service at a very small mark up to people. Many people who had phones at home would typically use PCOs to make long distance call. If I remember correctly, there are close to a million PCO that together provided 25% of the telecom revenue in India. This was wildly successful in India since most rural poor couldnt afford the high cost of telephony. And for most people it met all their needs. In many instances, the PCO operator had some other businesses on the premises. This provided the livelihood for many (and even now does ..)

Of course the govt decides who to give licenses to. That is another story :( ..

When people like us grew up and had to have phones, we simply bought into cellphone schemes since it took so long to get a land line anyway (because of govt monopoly), whereas we could get cellphones right away (which was open to private competition). Apparently telephone costs are coming down in a big way now in India ...

International call rates are high because of VSNL monopoly over all international calls. There is a date after which this is supposed to be opened up for private competition. But that keeps getting postponed.

Posted by: Kaushik on September 24, 2003 02:27 PM

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Actually, PCOs probably goes a long way towards explaining the low penetration of land lines in India.

A very large chunk of India (specially rural India) depended on basic service providers (called PCOs) who resold lond distance call service at a very small mark up to people. Many people who had phones at home would typically use PCOs to make long distance call. If I remember correctly, there are close to a million PCO that together provided 25% of the telecom revenue in India. This was wildly successful in India since most rural poor couldnt afford the high cost of telephony. And for most people it met all their needs. In many instances, the PCO operator had some other businesses on the premises. This provided the livelihood for many (and even now does ..)

Of course the govt decides who to give licenses to. That is another story :( ..

When people like us grew up and had to have phones, we simply bought into cellphone schemes since it took so long to get a land line anyway (because of govt monopoly), whereas we could get cellphones right away (which was open to private competition). Apparently telephone costs are coming down in a big way now in India ...

International call rates are high because of VSNL monopoly over all international calls. There is a date after which this is supposed to be opened up for private competition. But that keeps getting postponed.

Posted by: Kaushik on September 24, 2003 02:32 PM

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What is the current population of China ?
How many land lines and mobile are are provided till date in china? Similarly in India also.
Rate of growth of china in Mobile and land lines is fast as compared to India.

Posted by: Kamthanean on November 3, 2003 12:05 AM

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