Telecommunications

The Indian telecommunications industry is abundant with exciting possibilities. The industry is growing at the fastest pace in the world and India is expected to become the second largest telecom market globally by 2010. Forthcoming services such as 3G and WiMax will further augment the growth rate. The world's leading telecom handsets manufacturers, such as Nokia, Samsung, Motorola and LG have their presence in India, along with leading global service companies and infrastructure majors, such as Vodafone, AT&T, Ericsson, Alcatel, Singapore Telecom and Siemens. On June 18, 2008, India reached the target of having 300 million telephone subscribers, becoming the second largest telecommunications network in the world after China. India is adding around 8.5 million to 10 million new mobile subscribers to the network each month, emerging as one of the fastest growing telecom markets in the world. According to the report titled 'Mobile BRIC: Extreme Growth Ahead', BRIC (Brazil, Russia India and China) India is expected to be the second largest mobile market in the BRIC nations, with 560 million mobile users, by 2012 (after China with 800 million users). In July 2008, the cumulative revenues of cellular, fixed line, national long distance, international long distance, broadband, radio trunking and VSAT services, had risen to a humongous US$ 30,888 billion registering a growth of 21.3 per cent, as revealed in a Voice & Data survey. The Indian telecom market had generated revenues around US$ 20 billion in 2006-07. The market saw a growth rate of 33 per cent over previous year and recorded a compounded annual growth rate (CAGR) of 22 per cent for the period from 2002-03 to 2006-07. This growth has resulted in the revenues of the segment growing two-fold, in the past three years. It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10. India's overall tele-density stood at 26.89 per cent in June 2008, and the government has plans to raise the tele-density to 40-45 per cent by 2010, thereby offering greater growth opportunities for service providers to exploit the large untapped potential. Growth in Segments Indian mobile operators are adding over 8 million subscribers a month, with a majority of the new users being from rural areas. The share of mobile phones had increased from 71.69 per cent at the end of March 2006 to 87.68 per cent at the end of May 2008. While the total mobile subscriber base was 277.92 million, wire-line subscriber base was 39.05 million. The number of mobile subscribers in India, (India is the world's second-largest wireless market after China) has gone up to around 280 million. According to a report by Gartner Inc., India's mobile subscriber base is projected to exceed 737 million connections by 2012 growing at a CAGR of 21 per cent and India is likely to remain the world's second largest wireless market after China in terms of mobile connections. The overall cellular services revenue in India is projected to grow at a CAGR of 18 per cent from 2008-2012 to exceed US$ 37 billion. Cellular market penetration will rise to 60.7 per cent from 19.8 per cent in 2007. GSM companies added over 6.3 million new customers in June 2008, (excluding the GSM subscriber base of Reliance Telecom) crossing the 212 million mark, with a growth of 3.07 per cent over May 2008, according to the Cellular Operators' Association of India (COAI). According to an analyst firm Springboard Research, India will become the leading market for WiMAX in the Asia pacific region and is expected to have 15.8 million WiMAX subscribers by 2012, accounting for 46.7 per cent of total subscribers in Asia-Pacific and 35.7 per cent of revenues from the region. However, India had only 3.4 million broadband subscribers in January 2008, which was much lesser than the government's target of 9 million. Global consumer electronics and mobile phone vendors are going green in India. Bigwigs like Nokia, LG, Samsung and Haier, among others, are planning to introduce products that will be positioned on an environment-friendly platform, starting the trend of environment as a brand strategy in the Indian consumer electronics industry.