India: Telecoms set for explosive growth
...ket is now expected to be transformed through explosive growth, fierce competition, consolidation and investment. Explosive growth of mobile services. The mobile subscriber base (GSM and CDMA) reached 31.4m at the end of February 2004, with as many as 1.6m subscribers added in February. According to provisional forecasts made by Gartner, cellular connections will reach 56m by the end of 2004, up 96% from 2003, and 130m by 2008. The growth will be mainly driven by the removal of regulatory hurdles for CDMA-based mobile services (so-called limited mobility) through the adoption of a unified telecoms licence that allows them to offer fully mobile services, the reduction in pricing of cellular services, availability of a range of handsets priced at different price points, with several below the Rs3,000 (US$66) mark, and the falling cost of cellular infrastructure. Mobile connections overtaking fixed lines. The most significant feature of growth in the telecoms market is that cellular connections, once regarded as a luxury, are expected to overtake fixed-line connections, currently estimated at 42m, by the third quarter of 2004. Growth in the number of fixed lines has stagnated, with little or no competition challenging the two incumbent fixed-line operators--the state-owned Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL)--and no incentive for investment in fixed-line services. The neglect of fixed lines has several implications, not least of which has been the slow take-off of Internet and broadband services. Growth of SMS. One of the biggest successes in mobile services has been SMS text messaging. According...