Expanding subscriber base to drive growth

India is at present grappling with the problem of network congestion, thanks to the rapidly expanding subscriber base for mobile phones in the country. The Telecom Regulatory Authority of India (TRAI) had set the benchmark at 0.5 per cent for network failure, but studies have shown that in reality a whopping 80 per cent of the calls between networks in some areas from January to May this year were affected by poor quality or dropped completely. It is estimated that 5 million subscribers are added to the market every month. Operators need to upgrade their networks to absorb all the additional traffic

As Bharat Sanchar Nigam Ltd. (BSNL) is expected to award its $4.5-billion expansion contract by mid-October to two vendors, mobile phone manufacturers like Nokia, Ericsson, Siemens and Motorola are hoping to mop up big business this season.

Ericsson is also set to benefit from its relationship with Bharti Airtel Ltd., which recently awarded it a $1-billion network expansion deal following previous managed services contracts. This also could be an opportunity for the operators to upgrade the technology to 3G. Around 40 percent of BSNL's 45.5-million line order is set aside for 3G-ready equipment.