India subscriptions to reach 1.159 billion by the end of 2013
According to Informa Telecoms & Media's latest forecasts, the number of active mobile subscriptions in India will rise to 1.159 billion by the end of 2013, making it the world's largest mobile market. This will represent an extraordinary growth since 2000 when there were just 3.2 million active mobile subscriptions, and will account for 128% growth since the end of 2009, when the number was 508 million. Conversely, growth in China is set to slow so that by the end of 2013, the number of active mobile subscriptions will be 1.106 billion, up by 43% since 2009.
"There are two main factors fuelling this growth in India - increased competition and the prevalence of multi-SIM activity," explains Shannon Keefe, senior market forecaster at Informa Telecoms & Media. "One follows the other as a series of price wars and promotional campaigns has invigorated the dual-SIM market as consumers take advantage of short-term promotions from operators before leaving active SIMs dormant. With just three national operators in China, there is just not the same level of competition as in India, and therefore not the same febrile atmosphere surrounding pricing and promotional activity."
Not only will India surpass China in terms of the total number of active subscriptions by 2013 but according to Informa's forecasts, India's market will have a higher subscription penetration rate (75%) than China's by the end of 2011 (69%). By the end of 2014, India's subscription penetration will be 101%. This serves to accentuate the preponderance of multi-SIM activity in India and the speed with which cellular communications have spread to the mass market.
Looking at the Indian and Chinese markets from a revenue perspective, a very different picture of the two markets is formed. Informa Telecoms & Media projects that by the end of 2013, the Chinese mobile market will be worth approximately US$107.5 billion, as compared to India's mobile market, which is set to be worth approximately US$35.5 billion. Indeed, Informa Telecoms & Media projects that China's mobile data market by the end of 2014 will be worth more than the entire Indian mobile market. The intense competition dominating India's mobile market has made its impact on mobile ARPU, which is on average nationwide now US$3, as compared to China where mobile ARPU is just over US$10.
Bharti Airtel remains the largest of India's 13 mobile operators, with 127.6 million active subscriptions (March 2010) and a 22% share of the market, ahead of Vodafone Essar (17.6%) and Reliance Communications (17.2%). Rocked by the extent of domestic competition, Informa Telecoms & Media projects that Bharti's share of the market will fall to about 19% by the end of 2013 (233 million subscriptions). Interestingly, it will not be Bharti's main rivals stealing market share, but newcomers such as Telenor, Etisalat and Videocon, which will between them account for about 5% of the total market by the end of 2013, according to Informa's forecasts.
"And yet despite the likely growth in India over the next few years, it is striking that a key part of Bharti's strategy revolves around international expansion. Its aim to become the world's largest emerging markets player highlights its ambition but also accentuates the need for the operator to diversify from its own brutally competitive domestic market," notes Nick Jotischky, Informa's emerging markets principal analyst. "Another of Bharti's key strategic initiatives revolves around data services - the operator views non-voice services as being intrinsic to its growth strategy as its customer base continues to grow and as it seeks to offset the ongoing fall in voice revenues. The rising popularity of messaging services, future availability of 3G services and strong growth of mobile Internet and broadband will boost mobile data revenues in India during the next five years."
Informa projects that India's mobile data market will be worth approximately US$9 billion in 2014, up from US$2.3 billion in 2008 as subscribers in urban areas increasingly use their handsets to access multimedia services, and utility type services such as mobile payments and banking become more widespread in rural areas and smaller towns.
Whilst India and China will be by far the two largest mobile markets in terms of subscription numbers, the US market will be third largest (360 million), ahead of Russia (257 million) and Brazil (243 million), as the world's BRIC markets dominate the cellular telecommunications industry.
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