4G fueling growth
India is reportedly on its way to eclipsing 1 billion mobile subscribers. According to a report by Peter Evans, senior analyst Asia at BuddeComm, the world’s second largest country had 970 million subscribers as of March 2015.
Currently 77% of India’s population has access to mobile technology. That number is expected to reach 100% by 2020. In 2014, mobile technology brought in approximately $115 billion in value-added and made up 5.5% of India’s overall gross domestic product. The rollout of “4G” networks and technologies is a driving force behind the expected growth. Evans says the entrance of Reliance Jio, a new operator in the country, increased competition in an already hotly competitive market.
Bharti Airtel has already begun trials of its TD-LTE network in 20 cities with other major operators including Aircel, Vodafone, Reliance Jio, Idea Cellular and BSNL set to do the same by the end of this year or early next year.
The country is also overcoming regulatory issues that once stifled growth in the mobile space. The market grew on the back of sweeping reforms and new processes for auctioning spectrum, which was successful “despite criticism that the reserve prices had been set to high,” according to Evans.
“The removal of the cap on foreign investment in the telecom sector was yet another strong signal to the market of the government’s intentions,” Evans added. “The telecom market was still waiting on regulatory guidance with respect to mergers and acquisitions, however; this was important for the process of market consolidation to continue.”
Evans also points to the country’s booming economy, growing middle class, low tariffs and handset prices, along with the highly competitive market as major factors fueling the growing mobile market
Unsurprisingly, the expansion in mobile has led to a decline in fixed-line growth in India. That market has been seeing zero to negative growth in recent years. Despite only a 3% fixed-line penetration, 99% of the country has access to a telephone. In early 2015, there were around 26 million fixed-line subscribers.
