INDIA Telecom Report vFINAL DR 17/6/08 09:07 Page 15
Semiconductor India
Wireless potential
India’s telecommunications market is fascinating to analyse. It has replaced China as
the country to admire in terms of market growth. India was home to 17mn net
additions in Q305 alone, beating China’s 16.8mn for the first time. With China’s
market beginning to slow down in terms of growth, India’s mobile market is still
accelerating as Business Monitor International’s (BMI) latest report reveals
FOR the first time, India tops BMI’s The government has set a target of 500mn offers huge potential, the size of India’s
Business Environment rankings for the Asia mobile subscribers by the end of the broadband market is also growing, even if it
region. The reason for this is that a mixture decade. BMI has little doubt that this target is somewhat less noted. High speed internet
of factors, consumer demand, investment will be met, and indeed our forecast access is the next phase of telecoms growth
drives from India’s (Mobile Network suggests there will be 620mn subscribers at in India as rural connectivity brings with it a
Operations) MNOs and a government and the end of 2012 and 50% penetration. variety of opportunities, such as e-
regulator working to drive industry growth, governance, e-commerce, tele medicine and
have come together to highlight India’s However, in order for this to happen e-education. It is these demands that will
telecom market as one of huge potential India’s MNOs do need to continue their drive broadband growth over the next five
opportunity. This can be seen by the large investment drives, by improving years, and to such an extent that BMI
number of applications received by the infrastructure and enhancing capacity. The forecast a total of 47.5mn broadband
Indian government in the last quarter from signs are that this is happening. A subscribers by the end of 2012 and an
potential investors, both domestic and competitive market, which is led by Bharti average annual growth rate of 300%.
foreign, for mobile licenses. Airtel, but has Reliance, Vodafone Essar
and BSNL fighting it out for second spot, The Indian mobile market attracted 59.6mn
The figures for India’s mobile market give a will ensure that all operators continue to net additions during the first nine months of
clear idea of why this is the case. During invest in their networks. However, the 2007, accounting for 40% growth since the
the first nine months of 2007, India’s regulator and the government have corresponding period in 2006. India’s
wireless market grew by 60mn subscribers, important jobs as well, firstly to ensure that wireless market has come a long way since
accounting for 61% year on year growth in there is enough spectrum available so to 2004, when there were just 20mn new
the number of customers. At the end of the allow an increase in rural coverage, and subscribers over the whole year.
year, BMI expects there will be just over secondly to ensure that taxation levels on
230mn mobile subscribers in India, which mobile handsets and equipment does not Fast becoming one of the world’s mobile
will only just touch 20% penetration. And rise too much. Levels of taxation are very operators is Bharti Airtel, which by the end
that is the point. With large swathes of rural high with taxation reaching 26% of adjusted of September 2007 had 48.9mn subscribers
India still untouched, we can expect gross, revenue, compared with less than 1% and a 23.4% share of the market. Investing
sustained growth over the next five years. in China. It is not just mobile telephony that heavily in extending its network, the
Summer 2008 | www.semiconductor-india.com 15
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