One reason why the government is in such a hurry to resolve the current telecom tangle is that this is the biggest investment area in the country, much bigger than even software and business processing outsourcing services.

All told, if the country's teledensity is to go up to 12 over the next 3-4 years, from the current six, that involves an expenditure of around Rs 50,000 crore (Rs 500 billion).

By way of comparison, the software/BPO sector is expected to generate investments to the tune of $2-3 billion (Rs 9,500-14,000 crore) over the next three years.

During the entire '90s, in fact, it is this sector that has generated the fastest growth in investment, even faster than investments in "public administration and defence".

Investments in "communication", which is primarily telecom, according to CMIE (Centre for Monitoring Indian Economy) data, rose from around Rs 5,000 crore (Rs 50 billion) a year in the early '90s, to Rs 10,862 crore (Rs 108.62 billion) in 1999, to Rs 21,814 crore (Rs 218.14 billion) in 2001, and then fell marginally, to Rs 18,804 crore (Rs 188.04 billion) in 2002.

Investments in "other services" which would include software/BPO rose roughly along the same lines -- from Rs 4,674 crore (Rs 46.74 billion) in 1993 to Rs 18,225 crore (Rs 182.25 billion) in 2002.

According to analysis done by software consultant Sameer Kochhar, CEO of Skoch Consulting, the total investments in the sector (in technology and equipment) in the last ten years is a little over Rs 18,000 crore (Rs 180 billion).

The biggest growth in the telecom market, of course, has been the cellular one, with an annual growth of over 90 per cent on an average for the past 5 years, taking the total cellular users up to 20 million today.

The number of fixed line users, by contrast, is currently 40 million, but is growing very slowly, just a few lakh were added in the last 6 months. WLL-mobile services, of the type offered by Reliance Infocomm, are seeing around a million new subscribers per month.

The state-owned BSNL's network has gone up the most, by around 70 per cent in the past three years for both wire and wireless phones, and it plans to add another 7 million cellular subscribers this year and 10 million the next year.

All told, BSNL's capital investment is expected to be Rs 24,000 crore (Rs 240 billion) over the next 3 years. Reliance, the next-biggest investor, plans to invest Rs 7,000 crore (taking its total investment over in infocom to Rs 25,000 crore), and Bharti another Rs 5,000 crore (taking its total infocom investment to Rs 15,000 crore).

While the plethora of plans, and the huge exports from the software/BPO segment ($7 billion last year) generate huge investment expectations, according to Kochhar's analysis of all units covered by the Software Technology Park Initiative -- and this covers around 80-90 per cent of all companies -- the total investment of Rs 18,000 crore (Rs 180 billion) has generated exports of Rs 92,000 crore (Rs 920 billion) in the last decade.

Based on this, Kochhar estimates, a total of under $3 billion will be invested in the sector over the next 3 years -- over a five-year time frame, he expects the investment need to be $21 billion.

"Much of the investment will be required as exports pick up," he says, and cautions, "a lot of the plans announced by firms, is actually their total costs, and includes manpower costs."

Kochhar's estimates, however, are based on exports touching $31 billion by 2008, and not the $57-65 billion estimated by Nasscom, which he thinks are unlikely.

Microsoft, in turn, has announced plans to invest $400 million over the next 2-3 years in software development as well as in areas of education -- the company invested $50 million in the past two years.

Xanza plans to invest Rs 160 crore (Rs 1.6 billion) in three development centres with seating capacity of over 10,000 people.

EXL Services, a BPO firm whose revenues have gone up from $28 million in 2001-02 to an estimated $45 million this year plans to invest $7million (by December 2004) in a new call center, which will have 1,025 seats per shift.