Indian telecom market growing big, but constraints remain: report
18 Aug 2010
The Indian telecom market has been growing at a compounded annual growth rate (CAGR) of approximately 30 per cent since 1995 and is still going strong. With additions of more than 14 million subscribers a month in the year 2009, the wireless subscriber base has grown to 635.51 million in June 2010, second only to China, said PricewaterhouseCoopers (PwC) in a report titled 'Mobile broadband outlook 2015'.
Despite the strong growth, the report said, the industry also faces certain challenges such as low rural penetration, stagnant data usage over the years and limited broadband services.
However, the recently concluded 3G spectrum and BWA auctions saw intense competition among the bidders resulting in a revenue inflow of Rs1,06,000 crore for the government, surpassing most estimates. The number of 3G subscribers in India is projected to cross 107 million-mark by 2015, it stated.
It further said that given the context of non-scalable wireline infrastructure, broadband in India is expected to be delivered on a wireless platform. Mobile broadband using technologies in the BWA spectrum band, such as TDD LTE, are expected to address enterprises and high net worth individuals while broadband volumes are likely to be driven on the mobile platform leveraging 3G and HSPA technology.
On the key enablers of growth, Pricewaterhouse Coopers associate director Siddharth Vishwanath said the main driver for mobile broadband would be 3G and high speed packet access (HSPA) technology, while TDD LTE and in some cases WiMax, would mainly cater to the enterprise and high net worth individual segments.
"However, notwithstanding the fairly optimistic demand side scenario, spectrum remains a key constraint on the supply side for growth of MBS. To address this, appropriate policy changes and supporting regulatory frameworks need to be put in place." he added.
Initially, the uptake of mobile broadband services will almost exclusively be in urban India; however by 2015 rural subscribers are likely to comprise 24 per cent of overall 3G subscriber base in 2015. Introduction of new innovative applications, enhanced user experience, and decreasing prices of 3G/HSPA enabled handsets would be key driver for mobile broadband in India, the report said.
The mobile subscriber base in the country is projected to cross 1,000 million in 2014 driven by high subscriber additions in mostly rural areas. Mobile broadband service will generate incremental revenue of Rs940 billion in 2015 for telecom industry as a whole, the report said.
Robindhra Mangtani, senior director at GSMA, said mobile broadband should be recognised as a key component in any national broadband strategy.
