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PM says rural-urban divide in telecom growth must be bridged for socially inclusive growth
New Delhi, December 13, 2012
Prime Minister Manmohan Singh today said the full potential of telecommunication in enabling higher growth would not be realised until the use of telephones spread much wider in the rural economy of India as well.
"The exponential growth of the telecom sector has been primarily driven by growth in the use of telephones in urban areas," he pointed out at in his inaugural address at India Telecom 2012 here.
"While urban India has today reached a teledensity of 169 percent, the teledensity in rural India stands at only 41 percent. Not only this, the bulk of the 59 percent people who do not use phones in rural areas is perhaps from the socially and economically backward sections of our society," he said.
Dr Singh said the country must address this rural-urban divide if it had to achieve its goal of socially inclusive growth.
"Today, network coverage is there in most parts of our country and the bulk of the population is already covered. It is possible that there are economic or other barriers preventing the spread of telephone usage. There is also an economic case for investing in business at the bottom of the pyramid. I urge industry, which has shown great innovation in the telecom sector, to come up with strategies to expand teledensity in rural areas," he said.
He also urged the Department of Telecommunications to think big and think creatively to see how the resources available to it, either through the Universal Service Obligation (USO) Fund or otherwise, are better used to achieve this purpose.
"We cannot and we should not have an India where lack of a phone is a hindrance to inclusive growth. The New Telecom Policy-2012 envisages 70 percent rural penetration by 2017 and 100 percent by 2020. We should all work together to achieve these targets and in fact do better than what we have promised," he said.
The second issue that Dr Singh flagged was the availability of broadband services which, he said improved the lives of people by providing affordable access to information and knowledge.
"Many Information and Communication Technology applications such as e-commerce, e-banking, e-governance, e-education and telemedicine require high speed Internet connectivity. Studies show that there is a direct correlation between an increase in broadband connectivity and growth in a country’s GDP," he said.
The Prime Minister said the advent of smart phones and tablets at reasonable prices along with wide availability of telecom infrastructure across the country would provide an opportunity for it to ensure an equitable spread of broadband services.
"We must, therefore, seize this opportunity. Recognizing the significance of broadband connectivity as a tool for empowering our rural masses, our government has launched the National Optical Fiber Network project to provide broadband connectivity to all our Panchayats. I am confident that this unique project will usher a new era in telecommunications by establishing information highways across the whole length and breadth of our country, particularly in rural areas. I would urge all government departments and the private sector to work creatively to ensure that this infrastructure is efficiently used to make broadband services truly affordable and accessible," he said.
Dr Singh also reflected on the thinning down of domestic manufacturing capabilities in telecom in particular and in electronics in general over the past two decades.
"We need to strengthen our domestic manufacturing capabilities across the entire value chain in telecom and electronics. The new Telecom and Electronics Policies lay down the regime for enabling this to happen. Now it is for the captains of our industry, particularly in the private sector that they have to seize this unique initiative. As a major automobile buying country, we have developed a strong automotive sector. I believe this can be and must be replicated in telecom and electronics as well. We need leaders in telecom and electronics manufacturing who can break new ground and create the ecosystems to enable India to be a major producer of hardware. Our government is committed to doing everything possible to support such efforts," he said.
Dr Singh noted that the Indian telecom sector had seen phenomenal growth over the past decade or so. With around 96.5 crore telephone connections, India, today, is the second largest telecom market in the world as a whole. The telecom sector has also been the driver of Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) flows into the country. It has contributed in a major way to the dynamism of the economy, he said.
He said the sector had had to face some tough challenges in the past months but the period of difficulties was now coming to an end.
"During the last one year, our government has taken a number of forward looking initiatives in the telecom sector. We have announced the New Telecom Policy 2012. We have attempted to clarify the policy positions on a number of complex issues. We have attempted to ensure adequate availability of spectrum and its allocation in a transparent manner through market-related processes. I am confident that the futuristic policy regime that we are now putting in place will address, and address effectively, the concerns that have been worrying investors and will provide a new impetus to the growth of telecommunication industry in our country.
"The telecom revolution offers myriad opportunities for accelerating our nation’s development march," he added.