India's mobile economy to contribute $400 billion to GDP by 2020

NEW DELHI: Mobile economy in India, world's second largest market by subscribers, will contribute around USD 400 billion to the country's GDP and create 4.1 million jobs by 2020, a report by the global mobile operators industry body GSMA said today.

Mobile economy will also lead to investments of USD 9 billion in telecom infrastructure, said the 'Mobile Economy India 2013' report prepared in collaboration with consulting firm Boston Consulting Group.

"The Indian mobile industry is fast-paced and innovative, but it currently lacks the regulatory environment to support its ambitions," GSMA Director General Anne Bouverot said.

The mobile ecosystem generated about 5.3 per cent of GDP for India in 2012, directly supported 730,000 jobs and an additional two million jobs when points of sale and distributors are included, she added.

According to Bouverot, the report predicts that by 2020, mobiles will contribute almost USD 400 billion to India's GDP, create 4.1 million additional jobs and invest USD 9 billion in infrastructure, with USD 34 billion contributed to public funding.

She said, however, that an absence of predictable, long- term policies in areas like allocation of radio frequencies is acting as a brake on investment, and the government's target of increased rural coverage would be supported by a more flexible spectrum policy.

This would be feasible particularly with the release of more frequencies in the bands below 1 GHz and the development of allocation processes that do not focus solely on maximising short-term spectrum fees, Bouverot added.

"India is on the cusp of dramatic transformation, both economically and socially, through mobiles," GSMA India Director Sandeep Karanwal said.

The mobile industry is ready to work closely with the government, as well as other adjacent industry sectors, to accelerate growth through mobile, increasing technological innovation in India and enhancing the lives of the citizens, he added.