Thursday, June 18, 2009

$13 Billion by 2013; Can Indian mobile reach this milestone?

The Compound Annual growth rate (CAGR) of the Indian mobile market is projected to grow at 12.5 percent from 2009-2013 and will exceed by $30 billion. According to Gartner, the India mobile subscriber base will cross around 771 million connections by 2013 and will grow at a CAGR of 14.3 percent in the same period from 452 million in 2009. India is also expected to become 2nd largest mobile consumer market after China.

"The Indian mobile industry has now moved out of its hyper growth mode, but it will continue to grow at double-digit rates for next three years as operators focus on rural parts of the country, growth will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets," said Madhusudan Gupta, Senior Research Analyst, Gartner.

The mobile market incursion is projected to increase from 38.7 percent in 2009 to 63. 5 percent in the year 2013.

This growth is primarily because of the operators increasing their focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and lower handset prices, Gartner said.

Prepaid subscribers continue to be dominating the Indian mobile connection market. They accounted for more than 93 percent of all mobile connections in 2008 and are expected to grow to more than 96 percent of the connection base by 2013, surpassing 741 million connections versus 312 million in 2008.

The postpaid subscriber base will exceed 29 million subscribers by 2013; grow at 2.5 percent from 23 million in 2008.

The churn rate in India is 53.2 percent in 2009, and despite a maturing market, the ratio is expected to increase to 59.6 percent in 2013.

The overall growth of mobile services in India will be significantly contributed by revenue from data services, with a CAGR of 16.8 percent from 2009 to 2013. Prepaid subscribers are expected to adopt data services faster and more than the post-paid segment. The bulk of revenue will continue to come from voice services.

With the increased growth in data services, the percentage of revenue coming from voice will reduce from 89 percent in 2008 to 86 percent in 2013.

Gartner predicts that a significant drop in Average Revenue per User (ARPU), as the bulk of new subscribers will come from rural areas that are dominated by prepaid subscribers.

With the new operators joining the market, the voice tariffs will decline substantially in 2009. Growth will be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets.


1 comment:

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