India to have 771 million mobile connections by 2013

Gartner says that growth will come from an increased focus by operators on rural markets

India's mobile connections are forecast to top 771 million by 2013 after growing at a CAGR (compound annual growth rate) of 14.3 percent from 452 million connections in 2009, research firm Gartner said on Thursday.

Total mobile services revenue in India is projected to grow at a CAGR of 12.5 per cent from 2009 to 2013 to exceed $US30 billion, Gartner said.

The growth will come from mobile services operators increasing their focus on the rural market, lower handset prices, and local companies entering the domestic mobile handset segment, Gartner said.

India is expected to remain the world's second largest wireless market after China in terms of mobile connections, according to Gartner.

India had 404 million mobile subscribers at the end of April, according to the country's regulator.

The country added 11.9 million new mobile subscribers in April, up by 45 per cent from additions in the same month last year, according to data released earlier this month by the Telecom Regulatory Authority of India (TRAI).

The growth in mobile subscribers in the country has not been affected by the economic downturn because Indian consumers see communications as a necessity, according to research firm IDC India.

The PC market in contrast is subdued, and may see positive growth only by the third quarter of next year, IDC added.

Growth in the Indian mobile market will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets, Gartner said.

A number of mobile service providers are investing in adding new services. Idea Cellular, a large services provider, said on Thursday it had awarded a contract to Nokia Siemens Networks to upgrade its network so that it can offer value-added data services.

Idea subscribers will have access to services such as multimedia messaging, e-mail, web browsing, and online music by March next year, the companies said.

Revenue from data services will significantly contribute to the overall growth of mobile services in India, with a CAGR of 16.8 per cent from 2009 to 2013, Gartner said. The bulk of revenue will however continue to come from voice services.

With the increased growth in data services, the percentage of revenue coming from voice will drop from 89 per cent last year to 86 per cent in 2013, Gartner said.

A number of multinational mobile service providers including Vodafone, NTT DoCoMo, and Telenor have invested in Indian mobile services joint ventures.

Gartner forecasts a drop in ARPU (average revenue per user) and lower voice tariffs as competition heats up, and rural markets are targeted.

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