Category Archives: Telecom Industry

Where has the money gone? Here it is…

India’s Gold reserves with RBI are approximately Rs.1.25 lakh crores.

But, India is spending almost double this amount every year, on mobile services and handsets. And that is about 2.06% of India’s GDP…

Telecom and Mobile handset industry is where the money from average consumer’s pocket is going. No wonder most of the markets are reeling under slowdown. India spends less on goods and a lot of time and money on talking…

Check some interesting numbers to get a better perspective :

India’s GDP in 2012-13 : Approx Rs 114 lakh crores (Reference :Wikipedia)

India’s Telecom Services sector revenues in 2012-13 : Approx : Rs. 2 lakh crores based on Q4-2012-13 report of TRAI (Reference : TRAI Report for Jan-March 2013 Quarter)

Mobile handset sale of last 2 years : (Reference : Economic Times article here.)

a) 2011-12 = Rs. 31,330 Crores

b) 2012-13 = Rs. 35,946 Crores

That means, EVERY YEAR, approx Rs. 2.35 lakh crores are being spent in India on Mobile services and handsets. That is approx 2.06% of India’s GDP. Considering approximately, 120 Cr population of the country, this works out to about Rs.2000 average PER HEAD PER YEAR….!!!

This means that out of about Rs.90,000 per capita GDP, EVERY Indian is spending average Rs.2000 per year on mobile phones…! Now that is a significant number…! A lot of Indian money is turning into hot air.  This has a very serious possible repercussions on the Indian economy.

1) Notwithstanding the immense communication advantage of mobile and Value Added Services and their contribution to the economy at large, the actual productive usage of these facilities is comparatively lower. Most of the mobiles are used for non-productive purposes (Chatting, Social Media, Group messaging,  Playing games,Listening to music, as a Camera etc.). Along with money, this is wasting a lot of productive time of the country’s populace. The general population, newly exposed to this technological solutions, is behaving like a small child who has suddenly entered a room full of toys. The instincts ‘to be there among the crowd’ is costing the economy a very huge amount of productivity. Unfortunately, this will be realized later than sooner.

2) A lot of this money is going out of the country, as most of the telecom hardware, mobile handsets and accessories are imported. This puts a lot of pressure on the Indian rupee.

3) With many of the family members now having their individual mobile phones, the monthly budget of the average household is very strangely skewed due to mobile hardware and services claiming a significant amount. A lot of essential goods and services are becoming predictably unaffordable due to this imbalance in the household income and expenses. This is one reason why all other markets are reeling under reduced demand.

4) The social impact of ‘the mobile revolution’ is generating a lot of lonely souls, destroying the fabric of relationships. This also gives rise to a lot of psychological disorders. Small children exposed to mobiles early on are reducing time on physical activities and spending a lot of time on mobiles, limiting their wholesome physical growth. All this finally impacts the general physical and mental health of the country and then to the economy.

It will be good if the child gets wiser after playing with the new-found toys for a while and getting back to its normal life.

Otherwise, these toys will prove to be very expensive for the economy in the end.