State-run Bharat Sanchar Nigam Ltd, India's largest telecoms firm by sales, will shortly procure equipment to serve at least 30 millon more GSM lines as it boosts its user base in the world's fastest-growing major mobile market. "There are plans to procure at least 30 to 40 million GSM lines," Chairman A.K. Sinha told Reuters in an interview on May 04. "The plan will be finalised in two, three months." The promise of explosive growth has resulted in India's wireless sector becoming a magnet for global equipment makers such as Ericsson and Nokia, who are facing tepid demand for gear from most Western markets.

Only five in 100 Indians own a mobile phone, compared with more than a quarter in China, the world's largest mobile market.

Last year, New Delhi-based BSNL, India's third-largest provider of mobile services after Reliance Infocomm Ltd and Bharti Tele-Ventures Ltd, had placed an equipment order for 11 million GSM lines with Canadian equipment maker Nortel Networks Corp and Finnish giant Nokia.

India's flourishing wireless sector has grown at a compound 85 percent a year over the past six years, and tariffs have dropped 37 percent a year over the past four years to as low as 2-3 US cents a minute - the cheapest anywhere in the world.

Up to 1.7 million new mobile users enter the market each month, and the number is set to increase in coming months as carriers expand their reach in communication-starved rural areas.

"This equipment should be sufficient for two, three years," Sinha said.

BSNL, which began offering mobile services in 2002, has more than 9.4 million GSM users and about a million CDMA subscribers out of a total wireless market of more than 53 million customers.

The number of wireless users is widely forecast to cross 80 million by the end of this year and 200 million by 2007 as carriers expand into untapped rural areas, where more than 60 percent of India's billion-plus people lives.

Copyright Reuters, 2005