NEW DELHI – The India mobile subscriber base is forecast to reach 696 million connections in 2012, up 9 percent from 638 million in 2011 according to Gartner. Total mobile services revenue in India is projected to reach US$30 billion in constant US dollars in 2016. The average revenue per user (ARPU) began to stabilize in 2011 – a notable change from the double-digit decline of ARPU between 2008-2010.
“The staggering growth of mobile connections has been driven by the expansion of mobile services in semi-urban and rural markets and the availability of cheap mobile devices,” said Shalini Verma, principal analyst, Consumer Technology and Markets, at Gartner. “However, the other performance indicators of the Indian mobile market seem modest in comparison to those of markets such as China.”
At US$40, the ARPU in India is among the lowest in the world and about one-third of that of China. India also lags behind China in mobile service penetration. The mobile service penetration in India is currently at 51 percent and is expected to grow to 72 percent by 2016, whereas China already achieved 71 percent mobile penetration in 2011 and is forecast to grow to 119 percent in 2016.”
Mobile data revenue has tremendous growth opportunities in India because of low Internet penetration. While fixed broadband is becoming a norm in several countries, India is lagging behind even emerging markets in fixed broadband penetration. India’s fixed broadband household penetration was 6 percent in 2011, which is lower than the overall penetration in emerging markets (estimated at 16 percent in 2011).
While Indian mobile operators have demonstrated “out of the box” thinking in IT and telecom infrastructure management to check operational costs, they have their work cut out to improve margins, by converting prepaid subscribers into postpaid.
