Chennai: The Indian telecommunication market is projected to grow with a record combined annual growth rate (CGAR) of 13.42 per cent in the next five years despite the current slowdown in the world telecom market according to a Frost & Sullivan study.

During the next five years period, the teledensity in India is expected to cross 10 per cent with the ongoing aggressive push of communication facilities by both private and incumbent operators, according to the study.

"The proposed reduction in revenue sharing if materialised will be a major influx point for the industry as it will increase teledensity and will make service affordable to the common man," Frost & Sullivan director (technology practice) Manoj Sullivan said.

According to the study, the present price war in the Indian mobile and long distance segment will spill over to the international and local distance calls pushing the break even for major Indian telecom companies by some more years than projected earlier.

The study also foresees more scope for consolidation in the Indian telecommunication industry in 2003 mainly because in the present price war, only companies with "deep pockets" are expected to survive.

The study also points out that the "value for money" marketing proposition by wireless in local loop (WLL) operators will force the Indian cell operators to start offering enhanced value added service at competitive price and thus mitigate to the extent the threat of churn.

"Infrastructure sharing among companies is expected to gain popularity among Indian operators as this is an important strategic tool for cutting cost and improve bottom line," the study said.

The game today is about leveraging existing infrastructure as effectively as possible instead of making new investments into new networks for speedy roll out, according to Manoj Menon, who headed the study.

Mobile players in the more developed markets in Asia were now concentrating hard on retaining their subscribers and consolidating their efforts at an industry level to reduce resources into network build out, the study pointed out.

"Players would also need to develop strong business models and secure beneficial alliances which add value to their customers," the study said.

According to Menon, there will be little room for more than three telecom service providers in most countries across Asia Pacific adding that it is plausible that the regulators will be changing their stance to accommodate one that will balance the pace of innovation against the profitability of the industry at large.

PTI