Ref: MPML/PMS/103/2008
Date : May 24, 2008

India To Have 529 Million Telecom Subscribers By 2010

"INDIA will continue to be the fastest-growing telecom market in the world and its subscriber base will witness a compound annual growth rate of 28% till 2010 to touch 529 million, as against 310 million customers at present" "India adds more than 8 million subscribers a month, even as its fixed line segment has been experiencing a negative growth. "

India Will Remain Fastest-Growing Telecom Market In World: Study INDIA will continue to be the fastest-growing telecom market in the world and its subscriber base will witness a compound annual growth rate of 28% till 2010 to touch 529 million, as against 310 million customers at present, according to a joint report released by industry body Assocham and PWC. As per the report, the rest of Asia will witness a CAGR growth of 22%, while for both China and Africa, the projected growth rates are at 14% each, during this period. Indian telecom market also enjoys several advantages when compared to other European countries and these include the lowest tariffs in the world, a predominantly pre-paid driven market, the world's cheapest mobile handsets and intense competition driven by the a large number of players, the report states. It also projects that revenues from mobile services will increase to $35 billion by 2010, when compared to $22 billion in FY07. In the face of diminishing revenues from fixed line services, mobile services are hailed as the catalyst that is leading the mobile growth here. India adds more than 8 million subscribers a month, even as its fixed line segment has been experiencing a negative growth. The report points out that constant innovation in pricing of services and handsets were the two main factors contributing to the growth while adding that this had encouraged users to shift from fixed to mobile telephony. At the same time, the Assocham-PWC study also lists out a slew of challenges that operators will have to overcome to maintain the current growth rates. First, operators are confronted with falling average revenue per user (ARPUs) which coupled with lower tariffs would result in decreasing profit margins. While urban markets are fast reaching saturation, operators are yet to work out successful business models to target rural India, especially considering that the cost of setting up mobile networks in such places are considerably high. Operators will also find it tough to drive up data usage in rural India as there is hardly any content that is available in local languages, the report states. On the 3G front, the country will have to resolve the ongoing spectrum issues. The report also adds that internet telephony also called Voice over Internet Protocol (VoIP) could challenge the traditional voice telephony services dished out by telcos here. Although the Indian telecom industry is showing an upward trend, with an annual growth rate of about 25%, the country lacks in telecom manufacturing. According to the report, manufacturers from the 'far East were gaining dominance, particularly from China'. "Such companies are already in the third phase of their business evolution and can take advantage of not just low cost production capacities, but also a high degree of technological innovation and their own intellectual property," it adds, giving the example of China's Huawei, which has climbed to the number two position in DSL (broadband equipment) after Alcatel-Lucent. India, on the other hand, continues to depend largely on equipment imports which has gone up from 47% in 2004 to 59% in 2006. (Source: - Economis Times)