Indian cellular services market to surpass $37 billion by 2012: Gartner report

Indian cellular services market to surpass $37 billion by 2012: Gartner report

Author | exchange4media News Service | Thursday, Jul 03,2008 8:14 AM

Indian cellular services market to surpass $37 billion by 2012: Gartner report

Total cellular services revenue in India is projected to grow at a compound annual growth rate (CAGR) of 18 per cent from 2008-12 to exceed $37 billion, according to a report by Gartner, Inc. The India mobile subscriber base is set to exceed 737 million connections by 2012, growing at a CAGR of 21 per cent in the same period. This growth is poised to continue through the forecast period, and India is expected to remain the world’s second largest wireless market after China in terms of mobile connections.

According to Madhusudan Gupta, Senior Research Analyst at Gartner, “The growth in the mobile subscriber base is on the back of a rapidly proliferating rural market, lower handset costs, and low tariff rates in the Indian market. Rural telephony will continue to trigger growth and is expected to grow four-fold during the forecast period. Call rates have further dropped to about 1.5 cents per minute, narrowing the gap with fixed-line rates. These factors, along with an increasing competitive landscape, will fuel market growth and encourage the adoption of wireless services in the rural and semi-urban provinces of India.”

Cellular market penetration is projected to increase from 19.8 per cent in 2007 to 60.7 per cent in 2012. According to Gartner analysts, this growth could be primarily attributed to the increasing focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and lower handset prices.

The Indian mobile connection market continues to be dominated by prepaid subscribers. Prepaid connections accounted for more than 89 per cent of all mobile connections in 2007 and are expected to grow to more than 92 per cent of the connection base by 2012. The total services revenue for prepaid connections is expected to grow at 18.9 per cent CAGR for the period 2008-12, and the total services revenue for postpaid connections is expected to grow at 15 per cent CAGR during the same forecast period. By 2012, the prepaid subscriber base is expected to cross 683 million, while postpaid subscriber base is expected to exceed 53 million subscribers.

According to Gartner, the industry would witness several changes in the coming year that could revolutionise the face of the telecom industry with the introduction of new technologies such as WiMAX, 3G and Mobile Number Portability (MNP). India will move to its next phase of evolution with the commercial launch of WiMAX by the first quarter of 2009 and 3G by the second quarter of 2009. With the introduction of MNP in 2008, churn rates are not expected to rise significantly as India continues to be a prepaid dominated market.

Madhusudan Gupta pointed out, “The Indian wireless market is a vibrant, price-sensitive and high-growth market. With 14 telecom service operators already present and another two set to join, the Indian telecom industry is expected to see some level of M&A activity in 2009. Given the high level of competition and anticipated consolidation, different business models will emerge that could push tariffs further down, with Indian mobile service consumers set to emerge as the biggest beneficiaries.”

Tags: e4m

Write A Comment