India set to have 1 bn mobile users by 2014

>> Tuesday, May 26, 2009

One of the most important reasons for Bharti to emerge as a frontrunner for equity stake in MTN is its leadership position in India projected to be the world’s ranking telecom market in just a few years.

DoT, in a first ever forecast of mobile penetration across India for the next six years, has projected a billion mobile phones by 2014. This forecast is part of a spectrum committee report prepared by the DoT that is expected to be made public after the new telecom minister takes office.

It is well established that India has had one of the most remarkable growths in mobile phones since the sector was first opened to private investment in 1994. From two operators in each circle in 1995 the country now has 12 to 13 operators. Of these, about six to seven are fully functional, offering the Indian consumer unprecedented choice and low tariffs.

India has also been breaking all types of records on new subscriber additions in the last two years by adding up to 8 to 10 million phones a month, sometimes more. The latest report of the DoT put together by its committee shows that India will reach the half a billion mobile mark by 2010 and within four years reach 1 billion mobile subscribers.

In 2014, India’s population is expected to be 1.26 billion, with mobile penetration of 1.01 billion the mobile teledensity would be 80% above. It would mean 8 out of every 10 Indians will have access to a mobile device.

This probably reflects the world’s largest new growth opportunity over the next five years, surpassing China’s potential. China is already at nearly 700 million mobile phones as compared to India’s 400 million. The fact that India will add more than 600 million new subscribers must rate as the biggest subscriber adds for any country in the world.

Some of the imperatives to reach this figure would include redefining spectrum allocation and pricing policies, early 3G auctions, and reviewing the M&A norms.

It is clear that no country in the world can sustain a fragmented telecom market of 12 to 13 players per circle. In the end, the market will have to consolidate to between three to four national players and two or three regional players with an average subscriber base of approximately 150 million each by 2014.

Source - Economic Times.