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Cloud Call Center Community Featured Article

TMCNet: India's Mobile Users Exceed 500M

[December 28, 2009]

India's Mobile Users Exceed 500M

Dec 28, 2009 (Zacks.com via COMTEX) -- India's telecom sector has reached a major milestone recently with the country's mobile user base surpassing 500 million, boosted by a staggering 17.7 million new activations in Nov 2009.

According to the Telecom Regulatory Authority of India ("TRAI), India's mobile customer base crossed 506 million at the end of November. Currently, 43 out of every 100 Indians own a cell phone. Including roughly 37 million fixed lines, India now has a total of 543 million telephone lines, a penetration rate of around 46%. There is considerable headroom for growth given the underpenetrated rural regions.


Privately held telecom operator Bharti Airtel remains the market leader with roughly 116 million mobile customers recorded at the end of Nov 2009, followed by Reliance Communications (at 91 million) and Vodafone Essar (at 88.6 million), the Indian subsidiary of Vodafone (VOD). These big three national carriers each added 2.8 million new connections in Nov 2009.

Sixth-ranked Tata Teleservices, a joint venture between NTT DoCoMo (DCM) and India's Tata Group, continue to sign up the maximum number of new customers with 3.3 million in November. Fifth largest player Idea Cellular also had a strong month with 2.5 million new additions. State-owned mobile operator Bharat Sanchar Nigam Ltd ("BSNL), the fourth-ranked carrier, raked in 1.4 million new subscribers for the month.

India is the second largest mobile market in the world (after China). Despite the economic headwinds, the country's mobile subscriber base continues to grow at a healthy pace, adding more than 10 million new users every month. Availability of cheap mobile handsets, low call costs and the expansion of network coverage have largely contributed to this growth.

India's wireless sector is growing at a brisk rate in recent times, helped by the aggressive tariff cuts by established carriers and service expansion by existing and new operators. The country's mobile user base grew by 16.7 million in Oct 2009, up from roughly 15 million registered in Sep 2009. However, the growth has come at the expense of fixed-line telephony which continues to lose ground to the growing popularity of wireless. India's fixed-line connections dipped by 98,000 lines in Nov 2009.

Similar to other leading wireless markets in the world, India's mobile sector is characterized by aggressive price competition. Incumbent carriers are continuously waging tariff wars to gain market share. Mobile voice tariffs have reached as low as INR0.01 (US$0.0002) per second, leaving very little room for further tariff reductions.

Competition in the Indian mobile market will intensify in the near future as the country's telecom department is set to auction 3G licenses (likely in mid-February 2010). In addition to the existing Indian operators, the government is allowing international carriers to participate in the auctions. Foreign operators such as Telenor, NTT DoCoMo and Emirates Telecommunications are expected to bid for the 3G licenses. The incumbent operators will likely face challenges ahead to protect their market shares.

Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Investment Research.See all today's Analyst Blog entries.

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