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In a way FY 08 was a landmark year. The domestic IT market at 34% growth beat exports (27%) hands down. For years together it was exports that led growth, and that too by a significant margin. Also, this fiscal saw laptop sales cross the 20-lakh mark, with both commercial and consumer use taking off.

The other big achievement in 2007-08 was the mobile phone penetration going well past the 250 mn mark. The latest announcement to auction spectrum for 3G and wireless broadband in India now sets the stage for the next phase of growth. And this would be the growth of the common man, and therefore the growth of the domestic IT market.

Just imagine what 3G and WiMax will make possible. These technologies will enable high-speed hi-quality Internet, faster broadband wireless rollouts, better quality of voice, and better utilization of spectrum. The benefit would be for the entire spectrum of users in terms of applications like tele-education, tele-medicine, Internet gaming, mobile TV, and so on. And for the mobile worker the options to work from the field and remote locations will suddenly open up.

All this should also be good news for the Indian IT industry. The software component of roughly $2.5-3 bn that is expected to be pumped in by the telecom operators to deploy 3G, will mean that software players also get a piece of the pie. Further, all the applications and content that will be needed to leverage 3G for the common man as well as for business users will come from software and content companies, which have so far been small and insignificant in the overall arena.

Ibrahim Ahmad ibrahima@cybermedia.co.in

The benefits go far beyond the mobile phone users. The spectrum auction for 3G services is expected to get the government coffers up by anything in the tune of Rs 35,000 crore. This is a huge amount of money and even if a fraction of it could be re-deployed into projects like SWANs and CSCs, the entire landscape of India could be turned around. And the domestic IT market could explode.

A big challenge will be for the mobile users in Delhi and Mumbai, where the number of 3G players could be restricted to only two, if initial reports are to be believed. This could even result in costlier 3G services.

That this 3G policy does not help CDMA operators much is another challenge that must be quickly addressed by the government. There are thousands of business users who are on CDMA and will be severely handicapped if they cannot get next generation communications services. The Indian IT and telecom ministry, which happens to be under a single command, is hopeful to get spectrum from Defense, but could run into difficulties. In fact, many believe that more 3G operators for Delhi and Mumbai could be possible only in the next phase of auctioning.

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