650 million telephone connections are expected in India by 2012, including at least 200 million in rural areas, according to the Indian government Tuesday.

The country’s annual Economic Survey 2006-07, suggests that of the 650 million connections, 66 million will be over wire with 584 million wireless connections. The survey adds that, coupled with the rural connections, “tele-density in rural India would reach 25 per cent.”

The report highlights myriad factors that have contributed to the phenomenal growth India has seen in its telecoms sector. It says foreign investment in telecoms equipment manufacturing, in particular, has been “considerable” . Production of telecom equipment has increased from Rs 160.90bn (£1.9bn) to Rs 178.33bn, it said.

According to the report, wireless subscribers were growing at a CAGR of above 90 per cent per year since 2003.