Print this article

Comment This

Email this article

Year 2006 witnessed another excellent performance from the mobile communications business in India, registering more than 137 mn subscribers, and representing an increase of 62 mn, and over 82% growth for the year. The year 2007 looks even more promising: in March 2007, the cellular industry added 7.5 mn subscriptions, a considerable increase when compared to last year's average monthly growth of 6 mn.

Mobile penetration overtook fixed-line penetration in November 2004. Cumulative (fixed and mobile) teledensity has doubled in two years, reaching 18.26% at the end of February 2007, with a total of 202.74 mn phone subscribers, of which 162 mn are mobile and 40 mn are fixed subscribers. The government recognizes that access to telecommunications is essential for social and economic development, and has laid down very aggressive plans to increase the penetration of mobile services.

Dayanidhi Maran, the former union minister for IT and Communications, was the driving force behind the government's stated target of 250 mn telecommunications subscribers by the end of 2007. The telecom industry, fuelled by mobile communications growth, is going full throttle to achieve this goal, likely be achieved even earlier. The government is also targeting 500 mn subscribers by 2010, of which 75-80% are expected to be mobile; and 650 mn by 2012.

GSM is driving the mobile subscriptions growth in India. The March 2007 mobile growth (7.5 mn as mentioned above) included a record 6.13 mn new GSM subscriptions. GSM accounted for 121 mn mobile subscriptions by March 31, 2007. During 2006, GSM added 47 mn subscriptions and achieved over 75% market share in India.

Putting India in the international context, four of India's GSM operators are in the Asia Top 10 operator league (Q4, 2006). The GSM growth in India in the period from November 2006 to January 2007 compares favorably, globally.

The outlook for the mobile front is positive. Very large investments for expansion and growth are in the pipeline. For example, BSNL is currently finalizing a 45.5 mn line procurement contract for GSM. The industry is also in a phase of consolidation, while the increase in FDI cap is attracting interest from foreign operators.

3G in India
The major growth in India comes from the increase in the subscriber base for GSM. Looking at the global landscape, GSM increased market share to 83.9% by adding 511 mn subscriptions in 2006. This was 81 mn more than the total of all other mobile technologies including TDMA, PDC, iDEN, cdmaOne, CDMA 2000 1X and EV-DO, iDEN, all analogue, etc. India alone contributed nearly 10% of GSM's global growth.

Tariffs in India have fallen sharply to become the lowest in the world, while Indian operators have shown that telecom business is a profitable business. All major mobile infrastructure vendors have recognized the market potential here and strengthened their focus.

India is ready for 3G. The natural evolution path for GSM operators is WCDMA, an international standard developed by 3GPP and adopted by the ITU (International Telecommunication Union). WCDMA is the leading 3G standard, with 72% share of commercially launched 3G mobile networks globally. WCDMA is mainstream with 155 networks commercially launched in 68 countries, and an estimated 115 mn WCDMA subscribers (April 2007), representing 90% annual growth. WCDMA is widely deployed throughout Asia, Europe, North America, South America, Africa, and the Middle East. 3G licenses in Russia were awarded this month, and WCDMA systems will be launched later this year.

India needs 3G now, to alleviate the current serious capacity shortages, and deliver a cost-efficient platform for broadband wireless access with affordable service and broadband connectivity wherever there is mobile. 3G would give significant impetus to increase the overall Internet penetration in India. It is an opportunity for a mass market service which meets all requirements of the USO Fund for voice and broadband.

GSM operators in India are ready to enter the 3G market now with WCDMA. The technology is mature and proven; over 60 suppliers have launched some 650 WCDMA user devices. Majority of WCDMA operators globally are deploying High Speed Downlink Packet Access (HSDPA), the first evolution of WCDMA, which is a base station software upgrade to deliver typical user data speeds of 0.8 to 3.6 Mbps.

Most services benefit from HSDPA, which delivers high data throughput capabilities and shorter response time as a result of lower latency (round trip time). HSDPA is a great support to enterprise mobility and productivity. Other services are more feasible or enabled by HSDPA, such as VoIP, "Push to X" services, and mobile gaming. HSDPA delivers fast data access for music and video downloads, file sharing, large email attachments, web surfing, streaming services, more efficient mobile working, and more. It means a similar customer experience to the fixed broadband, and full mobility where needed. For operators, HSDPA drives cost and spectrum efficiencies, supports introduction of advanced services at lower costs for increased revenues and profitability, and maintains/improves competitiveness. HSDPA devices have entered the mainstream with over 250 user devices now launched.

Page(s)   1  2