India’s mobile subscriber base is set to cross 696 million connections by the end of this year, according to a recent report published by Gartner. The staggering growth of mobile connections has been driven by the expansion of mobile services in semi-urban and rural markets. In 2008, the story of the Indian mobile market was a bit different as the average revenue per user (ARPU) declined in double digits. This slump in the market continued till 2010 and almost all the carriers in India incurred hefty losses. However, in 2011, the Indian mobile market finally started to get back on track as the ARPU began to stabilize and with this constant betterment in ARPU, our country is projected to reach US$30 billion in constant US dollars by 2016.Gartner’s report also highlights that the total mobile penetration in India is currently 51 percent and these stats are expected to grow further as there will be 72 percent mobile penetration by the end of 2016 and the number of mobile connections will cross 900 million. This boost in number will happen due to the extensive availability of low-cost handsets, which are widely adopted by the Indian masses. Not only will the mobile subscriber base will expand but our network operators are also expected to increase their margins. Today, majority of the people in India “perceive mobile broadband as a basic necessity” and our carriers in turn, will be able to reap profits with increased data revenues.
“The industry is pegging its hope on market consolidation, which appears imminent in the aftermath of 2G license cancellations. Department of Telecom and Telecom Regulatory Authority of India have a pivotal role to play in removing uncertainties in policy-making, and license and spectrum management, so that the mobile operators can focus their energies on driving growth,” said Shalini Verma, principal analyst, Consumer Technology and Markets, at Gartner.
Though the ARPU of the Indian mobile services market is expected to grow, these numbers are still low when compared to that of China’s. The ARPU in India is among the lowest in the world and about one-third of that of China. India certainly lags behind our friendly neighboring country as China has already achieved 71 percent mobile penetration last year and these figures are expected to easily reach at 119 percent by 2016, whereas for India, it will take at least another 10-12 years for India to achieve 119 percent penetration.