India set to become 3rd largest market in 2006

Category: General | No Comments | Posted on January 21, 2006

India is expected to be the world’s third-largest mobile market by number of users, behind China and the United States.

It is widely seen as the last big market for mobile phone growth. Less than 40% of the country’s total area is covered by mobile networks, and fewer than eight in every 100 Indians use mobiles, compared with China’s 30%.

“We’ll see about 6 million new additions a month in 2006. The mobile base should double in 2006 to 130 to 140 million.”

At the moment, 4,000 towns and up to a third of India’s more than 600,000 villages are connected by wireless services.

“By end-2006, all the 5,200 towns and 300,000 villages will be covered,” said T.V. Ramachandran, director general at the Cellular Operators’ Association of India.

But cities such as Delhi and Mumbai boast phone penetration rates of about 40%, similar to East Asian levels.

“There will be an influx of funds as global investment communities and carriers look towards increasing their shareholder value by investing in India’s growth,” said Kobita Desai, principal analyst at research firm Gartner.

“Cash-rich European carriers are likely to make their presence felt in India. We see more foreign investment in this space, and are seeing a lot of interest from the Asia-Pacific region,” Ernst & Young’s Singhal said.

To fuel growth, the government raised foreign ownership limits in telecoms service providers to 74 percent from 49 percent, sparking global interest in the fragmented market.

Source: CIOL

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