The next phase of telecom growth will be driven by broadband paradigm, said Mr. R R Shah, Member Secretary, Planning Commission at a conference on "Connecting the Next 500 Million: Telecom Roadmap for the 11th Five Year Plan 2007 12", organised by the Confederation of Indian Industry.

Majority of the next 500 million customers in telecom will be in the rural areas, through rural connectivity. The approach to enable this will require the government to review the strategy pursued so far, and bring substantial change in policy framework followed, to enable the growth of the Telecom industry during the next Plan period, said Mr. Shah. Government is planning to develop villages as knowledge centers, he said.

There is a whole set of need at the rural level which has to be converted into opportunity in which Information and Communication technologies will have a major role, he said. Local content has to be encouraged to implement e-governance applications and connect rural India for the overall inclusive growth, he added.

There will be substantial outlays in the next plan period for education and health. Rural connectivity, e-governance applications, e commerce, tele-medicine and e-education which are going to contribute to substantial growth of telecom industry in the next phase of inclusive development in the 11th Five Year Plan period up to 2012, said Mr. Shah.

Mr. Sanjeev Aga, Chairman CII National Committee on Telecom and Broadband and Managing Director, Idea Cellular Limited said that telecom industry is facing the challenges of interconnectivity as well as growth and expansion within the sector. He emphasised on the need that the government should instill confidence of the telecom industry by planning standard policies for the sector. Mr. Aga suggested that telecom policy should be integrated with national planning process undertaken by the Planning Commision.

Next three years will be difficult for the telecom industry as telecom companies will enter different geographical and socio-economic regions to foster growth, said Mr. Aga. The cost of passive infrastructure is enormous and telecom companies should consider the infrastructural challenges in the rural areas, he added.

Mr. D Shivakumar, VP and Managing Director, Nokia India Pvt. Ltd. said that telecom sector in India has grown because of innovative schemes offered by Indian operators. Growing economy, consumer spend, consistency of policy framework, operator's innovation and affordable handset will enable the telecom sector to reach the target of 500 million connections by 2010, said Mr. Shivakumar.

The telecom growth will bring prosperity in rural areas and push the productivity in all the sectors, said Mr. Shivakumar. Affordability and availability of infrastructure will be key challenges for telecom industry to reach the rural customer, he mentioned. Value added services (VAS) industry is going to reach Rs.77,823 crores in 2012 which would be around 25% of mobile telephony market, informed Mr. Shivakumar.