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India to remain highest growth mkt for telecom

08-December-2004
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India to remain highest growth mkt for telecom

Driven mainly by mobile phone technology, India will remain the highest growth market for telecommunication in Asia pacific region with around 35 million new subscribers in 2005 marking an 18 per cent increase from 2004.

Global IT research and analysis firm Gartner Inc on Tuesday predicted that Indian enterprises were likely to spend us dollar 16.7 billion on telecom in 2005.

"Consumer segment is rapidly gaining importance, driven by adoption of mobile services. This is reflected in their increased contribution towards spending for telecom services, from 35 per cent in 2002 to 43 per cent in 2005. By 2008, the consumer segment will account for 52 per cent in telecom spending," Gartner India principal analyst Kobita Desai told reporters in Mumbai on Tuesday.

Gartner's prediction include that mobile penetration in India would reach 8.2 per cent in 2005 and 14.5 in 2008 while combined (fixed and mobile) penetration would grow from 12.4 per cent in 2005 to 19.1 per cent in 2008.

Gartner also estimated that the broadband market would double in size to cross one million subscribers and the telecom companies will enter into the video market.

"International bandwidth prices in India will drop by 30-40 per cent in 2005. The telecom market will remain crowded with five key players jostling for market share in cellular space", Gartner said.

Desai said mobile companies must change the focus to consumer segment from corporate market. Though the margin is more with corporate clients, the actual revenue would come from consumer segment in coming years. The acquisition and retention cost would be low with the consumer segment.

With the international handset manufacturers setting up their base in India, the cost of these should also go down, she said.

Interestingly, the enterprise spending on information communications and technology (ICT) in India is expected to grow at 16.6 per cent to $22.88 billion as compared to Asia pacific growth at 7.6 per cent in 2005," Gartner India vice president & research director Sujay Chohan said.

In India, of the $22.88 billion spend in 2005 on enterprise ICT, $3.3 billion is the projected spend on hardware, an increase of 21.1 per cent over 2004; $0.52 billion (16.4 per cent increase) on software; $16.7 billion (15.5 per cent increase) on telecom and $2.32 billion (18.3 per cent increase) on IT services.

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