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India to have 6.6 cr mobile connections in 2010 |
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The mobile connections in India will grow by 27.3 per cent in 2010 to reach in excess of 660 million (6.60 crore), according to Gartner. Mobile service revenue in India will reach $19.8 billion (Rs 93,287.69 crore, approximately) by the end of the year, up 19.7 per cent from 2009.
"The arrival of new players in the Indian mobile sector has led to fierce competition which has sustained the strong subscriber growth we saw in 2009. Furthermore, with mobile penetration standing at 44.5 per cent at the end of 2009, there is still ample room for growth in 2010 and beyond," said Neha Gupta, senior research analyst at Gartner.
In 2010, mobile penetration in India is projected to 55.9 per cent, and Gartner expects the Indian mobile industry to grow at double-digit rates till the end of 2012 with mobile penetration increasing to 72.5 per cent in 2012. The mobile density is projected to increase further to 82 per cent by 2014, mainly due to the service providers increasing their focus on the rural market and lower handset prices.
By the end of 2014, total mobile services revenue in India is forecast to exceed $23 billion (Rs 1.08 lakh crore), and India is expected to remain the world's second largest wireless market after China in terms of mobile connections.
Nevertheless, despite the healthy overall outlook, Gupta explained that the Indian mobile services market is going through a state of flux, with the arrival of many new players leading to a decrease in price points for the industry. Analysts believe that some market consolidation will happen over the next 18 months as the launch of 3G services enables service providers to distinguish themselves on services offered rather just on prices.
Further uncertainty has also resulted from the recently completed government auction of 3G and Broadband Wireless Access licenses which have lead to an increase of capital expenditure by several operators, which in turn will increase the net debt at the industry level. However, strong growth in subscriber base and revenues is expected to increase the operating cash flows which will absorb its impact.
"The increase in competition in the Indian mobile market has led to price wars which have in turn led to a decline in voice Average Revenue per User (ARPU), and we expect this trend to continue as service providers increasingly shift their focus to rural areas. Expect a dramatic decline in growth of voice revenue from 2010 until the end 2014, although this will be balanced by increased revenue from data services which will significantly contribute to the overall growth of mobile services in India," Gupta said.
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