Shortage of radio frequency can hamper the growth of India's telecommunications industry and the policy to allocate this must be fair and transparent, said Prime Minister Manmohan Singh.

"I am aware that spectrum availability can be a constraint for the growth of this sector. On the supply side, our government has taken steps for vacation of spectrum by existing users," Manmohan Singh said while inaugurating the Indian Telecom 2007 conference.

"This is at an advanced stage and the requirement of making spectrum available for commercial uses is being addressed," he added.

He also said, "The policy regime for making spectrum available should be fair, transparent, equitable and forward looking. It should not create entry barriers to newcomers or barriers to the continued growth of the sector. At the same time the revenue potential to the government must not be lost sight of. After all, governments across the globe have harnessed substantial revenues while allocating spectrum."

The Indian telecommunications industry has been divided into two groups over the contentious spectrum issue. Spectrum or radio frequency is the lifeline of any telecommunications operator.

India is adding about eight million mobile telephone subscribers a month. This has led to severe shortage of spectrum for telephony operators.

The prime minister also highlighted other constraints the industry is currently facing, including skilled manpower and quality infrastructure.

"The major constraints I foresee are the availability of skilled manpower and of high-quality infrastructure. The infrastructure needs of the country are in excess of $450 billion in the next five years and we need to work towards facilitating investment on such a large, massive scale," he said.

He added that the growth of the sector acted as a catalyst in the country's development.

The prime minister also expressed serious concerns over the reach of telecommunications in the country's hinterland.

"Although the growth in the last few years has been truly impressive and our tariffs are among the lowest in the world, vast stretches of our rural population have little or no telecom penetration," he said.

Manmohan Singh said that even though the country was adding subscribers at a galloping pace, the industry had minimal presence in research and development (R&D) and manufacturing.

"I am concerned about our capabilities in telecom R&D and manufacturing. Can we have a sector where we are world-class in telecom networks but do not have an adequate manufacturing presence?"

"We, however, need to also create an ecosystem for the rapid growth of manufacturing for telecommunication products. We need to build on our well recognised capabilities in software and IT to establish a large scale presence in manufacturing as well."

IANS