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China and India have roughly the same population, but when it comes to mobile phones, there is no comparison between the two. In India, seven years after the launch of mobile-phone services, there are only 10 million users. In China, half that number signs up as new subscribers every month.
    Geography and culture explain some of the differences. The concentration of economic activity in China’s eastern coastal region gave its mobile operators big economies of scale, allowing lower prices. In China, telephones quickly came to be regarded as fashion items, something that has only recently happened to India.
    But the main difference is regulation. India chose a licensing policy that divided the country into 22 regions, each with two licenses to operate mobile networks. Bidding in multiple regions was restricted. This aimed to promote competition, but led to a fragmented market with a baffling array of operators, none of which has economies of scale. Limited spectrum also hurt service quality.