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India Likely To Cross 500 Million Internet Data Subscribers By 2018

MUMBAI – With the rise in number of smartphone users in India and declining price rates of handsets in the market, there is an increasing rise of data subscribers in the country. A report by Morgan Stanley stated that the growth will be an average rate of 25 percent every year and will reach up to 519 million by 2018. The report also suggested that Internet users will rise to 330 million by 2016 with supporting factors like faster bandwidth, high internet content and rise in online services.

“By FY2018, we expect data subscribers to grow at a 25 percent CAGR (compound average growth rate), from 210 million to 519 million and see a 35 percent CAGR in data usage to750 MB per subscriber, near the Asian average,” the report said.

The report said over the last two years, smartphone prices in the country have come down from $200 to $50. As per telecom regulator Trai’s data, total Internet subscribers in the country at the end of September 2013 stood at 210 million.

Of those, 188 million (90 percent users) access it on mobile devices. Of the rest, 7 million were narrowband subscribers (with speed less than 256kpbs) and 15 million were broadband subscribers (with speed of over 256kbps). “Data is the next growth leg. We expect data contribution to more than double to 23 percent of overall revenues (as against 10 percent currently) in the next two years,” the report said.

The report said data growth will be driven by operator strategy of lower average revenue per mega byte (ARMB) for higher MB pack and operators having a strong data ecosystem, including strengthening spectrum portfolio. “A 3G, 2GB pack in January 2013 cost 750 or 38 paisa ARMB. Today a 2GB pack costs 450 or 23-paisa ARMB,” the report said. Morgan Stanley said voice and data rates are the lowest for Indian operators as compared to Asian counterparts and the difference between voice rate per minute and data rate per MB is not significant.

“Thus, the risk of data cannibalising voice is very low. Our case study on over the top (OTT) applications like WhatsApp and Skype indicates exponential rise in data volumes despite compression,” it added.

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