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The telecommunication industry has played an important role in the development of the country’s economy over the last few years. Not only has it increased connectivity across the country, it has also helped in stimulating other sectors of the economy. The telecommunication sector in India comprises several segments, namely wireless services, wire line services, internet and broadband services, satellite and cable television services, mobile valued added services and telecom equipment manufacturing.
Other than the wireline segment, all other segments have witnessed growth in the past few years. Currently, India is the world’s second largest telecommunication market in terms of mobile cellular subscribers. The Indian telecommunication industry had a good year in terms of subscriber growth but was marred by policy and regulatory issues. In February 2012, Honorable Supreme Court of India cancelled 122 telecom licenses of 11 companies owing to their alleged involvement in 2G spectrum allocation scam. In view of the directions given by the Supreme Court, the government held auction for the 2G spectrum at the end of 2012. However, the 2G auction concluded in just two days with a tepid response. Only five players participated in the auction, of which only two were among those whose licenses had been cancelled. On 16 July 2012, the government in a move to push reforms allowed the much anticipated 100% FDI in the telecom sector.
The outlook for Indian telecommunication is positive as far as rural wireless, internet and broadband segment is concerned. The low penetration rates existing in these segments will enable high growth rates both in subscriber additions and revenue in the next few years.
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