Budget 2011-12: Telecom Sector

The Budget 2011-12 will be presented by Finance Minister Pranab Mukherjee on 28th February 2011.

The telecom sector was in the limelight for all the wrong reasons in the current financial year. Former telecom minister A Raja awarded licenses and 2G spectrum at a much lower rate than prescribed by the government. The latest issue of Swan Tele also raised eyebrows of some big corporate houses involvement in the ongoing probe by CBI.

The sector has performed exceptionally well in the last decade. India's teledensity has gone up from under 4% in March 2001 to more than 50% in 2010. The teledensity growth was backed by the cellular telephony segment growth with the mobile subscriber base of 600 million.

The entry of several new telecom operators also led to reduction in tariff and decline in handset costs. The substitution of landlines with mobile phones had an impact on fixed line segment. In the broadband segment, the auction for broadband wireless license and spectrum was executed last year. A phenomenal growth is expected in this segment in the coming years.

Vodafone, Idea, Bharti and Aircel have emerged as beneficiaries of MNP, based on data (reported in media) as of 31 January; notably, MNP was launched on 20 Jan