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Teledata

Tele Data

Mobile Subscribers Yearwise comparision

3G users in India will touch 400 million within four years: Joss Gillet, Wireless Intelligence

March 08, 2011

The numbers of 3G subscriber connections in India are forecast to reach 400 million within four years, representing almost 30 percent of the country's total. According to a new Wireless Intelligence study, India 3G rollout (forecasts and market shares 2011 – 2015), 3G connections are set to grow three-fold between 2011 and 2015 as operators ramp-up rollout of new 3G networks.

Indian operators spent a combined US$15 billion in acquiring WCDMA 3G spectrum at auction last year and are forecast to jointly invest a further US$2.5 billion in building the new networks and rolling out 3G services in 2011.

Seven Indian operators acquired 3G spectrum last year in addition to the two state-owned operators (BSNL and MTNL) that had already been awarded 3G airwaves ahead of the private auctions. The study notes that over 80 percent of 3G connections will be based on WCDMA in five years, with the remaining 20 percent on CDMA-based 3G networks. Operators Reliance Communications and Tata Teleservices Ltd (TTSL) have both offered 3G CDMA for a decade; but both are also in the process of migrating to GSM/WCDMA and were the first two private operators to launch services using new WCDMA spectrum in Q4 2010. Reliance and TTSL are set to command 3G market shares of 39 percent and 30 percent, respectively, this year.

However, 2011 has already seen a succession of rival launches – including Bharti (in January), Aircel (February) and Vodafone (March) – and Wireless Intelligence forecasts that all new WCDMA-based operators will have launched services by June 2011. This means that, by 2015, 3G market shares will more closely resemble the overall national picture: Bharti – India's largest operator - is forecast to command the largest 3G share (18 percent), followed by Reliance (15 percent) and BSNL (13 percent).

"Competition in the Indian 3G space is likely to be intense as most operators have set ambitious targets," said Joss Gillet, Senior Analyst at Wireless Intelligence and author of the report. "Market share growth clearly depends on how fast operators can deploy 3G networks in their respective licensed areas, and how rapidly they can address demand in rural areas. Nevertheless, 3G will remain a niche market for some time in India, and 2.1GHz networks will initially bee mainly used to improve voice quality and reduce congestion in existing 2G networks."

The study notes that India's Circle A and Circle B service areas will account for 75 percent of the country's 3G connections by 2015.

Even though initial 3G rollouts are concentrated in the so-called metro areas (Mumbai, Delhi, Chennai, Kolkata) they will soon be outstripped by fast-growing demand for 3G in more populous regions such as Punjab, Bihar, Andhra Pradesh and Haryana, the report says. But the situation is complicated by the fact that no 3G operator is able to offer a nationwide service, which will require network sharing and roaming between operators. Pricing 3G services appropriately in a market where around 200 million prospective users live on less than US$2 a day is also set to be a major challenge.

"Indian operators are betting on 3G services to stabilise ARPU and increase non-voice revenues to around the 30 percent mark in the coming years," added Gillet. "Even though we do not anticipate a price war in the 3G space, profitability will take time due to the high investments required and the current need for additional spectrum. While network-sharing deals will help speed-up the adoption of 3G services and increase economies of scale, it is clear that device availability and affordability will have a more immediate impact on demand in such a price sensitive market dominated by prepaid users."

 
 

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