India cell phone penetration to reach 97 percent in 2014

EL SEGUNDO, USA: Cell phone ownership has become near ubiquitous in India, with wireless subscriptions in 2014 expected to amount to more than 97 percent of the country’s population of 1.26 billion, according to the market research firm iSuppli Corp.

With about 19 million new subscribers added each month during the first four months of 2010 alone, India’s wireless subscriptions are going at a rapid clip. By the end of this year, total wireless subscriptions are projected to reach 766.0 million—45.9 percent higher than the 525.1 million subscribers counted at the end of 2009, iSuppli mobile industry forecasts show.

The pace of growth for the future shows little sign of slackening. Subscriber numbers will continue to increase during the next four years, topping the 1 billion mark by 2012, as shown in the figure.Source: iSuppli, USA.

By 2014, mobile teledensity—a measure of cell phone availability—likely will reach 97.4 percent per 100 persons.

“Such high mobile teledensity means that almost everyone—except children and the abjectly poor—will have a cell phone in India, with those having multiple mobiles boosting total subscription rates and compensating for those without,” said Jagdish Rebello, Ph.D., senior director and principal analyst for wireless research at iSuppli.

All told, the CAGR for mobile handset subscribers in the world’s second most populous country after China will reach 18.6 percent from 2009 to 2014.

Driving the overall growth of wireless subscribers is the expansion of the rural Indian market, where entry-level handsets are most popular.

“A key trend in 2009 was the shift in focus of service providers and handset manufacturers toward the countryside, which continues to offer significant and untapped market opportunity,” Rebello said. “In comparison, the urban market—which accounts for only 30 percent of the country’s population but represents almost 70 percent of telecom subscribers—is close to saturation.”

Accompanying the surge in wireless subscriber numbers is an equal burst of activity in the country’s wireless infrastructure equipment market. With telecom operators upgrading and expanding existing networks, spending on India’s wireless infrastructure equipment market in 2010 will reach $10.8 billion, up 29.7 percent from $8.3 billion last year.

By 2011, network infrastructure spend will rise to more than $11 billion, thanks to the rollout of WiMAX and 3G mobile technology services. The launch of 3G technology in the fourth quarter of 2010 is also expected to significantly boost the sales of smart phones in the country, iSuppli’s India telecom market research shows.

Not surprisingly, a supply chain for telecom manufacturing is emerging, with manufacturers establishing local plants to save on importing costs. Local production capabilities will provide manufacturers with a distinct advantage in the price-sensitive rural Indian market, and various players already have announced their plans to further invest in the expansion of manufacturing and R&D facilities.

Source: iSuppli, USA.