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India & the Indian Telecom Market Q & A

What is the population of India?

India’s population is 1,147,995,898 (July 2008 est. US Central Intelligence Agency)
It’s spread across 25 states. Almost 800 million live in rural areas.

What is the mobile penetration in India?

Cellular networks in India cover:

“…approximately 60 per cent of the Indian population and nearly 39 per cent of India’s physical territory.”

- “Rustic Flavor”, Voice and Data Magazine, 3 June 2008

May 2008 Figures from Telecom Regulatory authority of India (TRAI):

  • Total number of telephone connections = 316.97 million
  • Total wireless subscribers (GSM, CDMA & WLL(F)) = 277.92 million
  • 8.62 million new wireless subscribers added May 2008
  • 8.21 million added during April
  • Overall teledensity is 27.59%

July 2008 figures from TRAI, as cited in Hindu Business Line:

  • Total number of telephone connections = 334.84 million
  • Total wireless subscribers (GSM, CDMA & WLL(F)) = 296.08 million
  • 9.22 million new wireless subscribers added July 2008
  • Overall teledensity is 29.08%

What about ARPU (Average Revenue Per User)?

“Worldwide wireless subscriber base expected to increase by 11.7% percent from 2.6 billion in 2006 to 4.6 billion in 2011. GSM is expected to remain as the most dominant medium for mobile communications. ARPU from subscribers living in low-income rural communities is forecast to drop as low as USD 4.0 per month in India, USD 3.5 per month in Pakistan and USD 3.0 per month in Bangladesh.”

- Portio Research report, October 2007

How large is the rural market?

“The Indian rural market comprises 600,000 villages and close to 800 million Indians. It accounts for approximately 50% of the economic output and 57% of consumption. It is expected that of the next 250 million Indian wireless users, approximately 100 million will be from rural areas.

Operators still need to innovate and embrace viable business models in rural India. While there are efficient models that have worked in the high density urban areas, the private sector is still under pressure to find a feasible business model for the rural market.”

- “Rural Telecom: The Last Frontier. Connecting India’s rural telecom community”, July 2008, Ernst & Young and the Federation of Indian Chambers of Commerce and Industry (FICCI)

How large is the market for rural equipment manufacturers?

Between 1.5 and 2 million new base stations will be required to extend service to the next two billion subscribers and more than half of these will be located in areas without access to electric grids.”

“Mobile Networks go Green: the Lean Base Station”, Unstrung Insider, May 2008

What is the growth potential?

“India, not China, will be the greatest contributor to the ‘next billion’ mobile users, adding 294m subscriptions between year-end 2006 and year-end 2010. India’s 14% penetration rate (versus China’s 42%) gives this market substantially more room to grow.”

- “The Next Billion: How Emerging Markets are Shaping the Mobile Industry”, Pyramid Research, Oct 2007

Of the world’s top 10 growth markets, India is number one with 294 million subscriber additions from 2006-2010, a 21% share of new additions.

Miscellaneous facts

  • 600 rural exchanges in Bihar state do not function due to lack of power (Source: Mr.Manoj Kohli, CEO of Bharti Airtel)
  • In India alone, 2 billion litres of diesel fuel are burned annually just to power the diesel generators needed to keep Base Stations running. 2 billion litres is the annual milk production in Venezuela, and the total amount of bottled water consumed in the UK every year.
  • 32% of Airtel’s operating costs are fuel and power, according to its 2006/7 annual report

Useful websites

  • Cellular Operators Association of India – www.coai.in
  • Government of India Department of Telecoms – www.dot.gov.in
  • Association of Unified Service Providers of India – www.auspi.in

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