Growth Drivers of the Indian Telecom Market:

• High Disposable Income: The growth in GDP has resulted in increasing disposable income among the individual population. Therefore the young Indian population is increasingly investing more money in various entertainment and communication services thus fuelling growth of the telecom sector.

• Mobility and Connectivity: The growing need of high mobility and staying connected is the prime driver for the entire category. This is true for people from different age groups and occupation. This innate need coupled with availability of handsets and connectivity at affordable price points has triggered the growth of telecom in India.

• Investments in Telecom Industry: All major telecom handsets manufacturers – including Nokia, Samsung, Motorola and LG - have their presence in India, along with the leading global service companies and infrastructure majors, such as Vodafone, Singapore Telecom, AT&T, Ericsson, Alcatel and Siemens.

• Government Initiatives: Government also has supported the growth of this sector by coming out with a number of initiatives for the low end subscribers of rural India, and Universal Service Obligation (USO) fund was one such initiatives. The USO fund was an initiative taken up by the government to increase rural tele-density.

• Gradual Progression in Telecom Sector: There have been major regulations and events driving the extra ordinary growth of Telecom sector from the year 1999 to 2008. High level of competition has lead to price reduction and increased affordability. In order to capitalize this opportunity of meeting the consumer needs in highly competitive market the operators have reduced the tariffs to attract consumers with low purchasing power primarily in semi urban and rural India. In fact lucrative offers like being paid for incoming calls have transformed the scenario completely.

Operators are tailoring service packages for low-end users making mobile service more affordable like:

Ø Micro Prepaid Cards: Recharge options as low as INR 10 (USD 0.25)

Ø Life Time Validity: All operators offer a “lifetime prepaid” plan which maintains the phone number for life for free incoming calls if recharged every 3 or 6 months

Ø Full Value Recharge: Talk time of value equal to the recharge amount

Ø Free In-Network Calls: Some operators have started free unlimited local in-network calls

Ø Group Calls: Unlimited calls among a limited set of people at a particular cost.

Ø Bulk SMS Pack: Plans customized for bulk SMS within a specified area at a much lower cost