India best bet for mobile users

Hyderabad, Mar 29 | Updated: Mar 30 2007, 05:38am hrs
Driven by reduced calling rates, decline in handset prices and the expansion of network infrastructure in the emerging markets of India and Indonesia, India has overtaken Japan as the second-largest mobile services market in Asia-Pacific in terms of subscribers after China (on June 2006).

In fact, with 142.7 million subscribers in 2006 and a mobile penetration rate of only 13%, the market in India still remains largely untapped. Asia-Pacific remains one of the few high-growth mobile markets in the world, a Frost & Sullivan study said.

New analysis from the Asia Pacific Mobile Communications Outlook 2007 reveals that the market, covering 13 major Asia-Pacific economies, grew at a compound annual growth rate (CAGR) of 24% between 2002 and 2006, reaching a subscriber base of 0.95 billion in 2006. With a mobile penetration rate of 30.9% in 2006, the Asia-Pacific mobile subscriber base is estimated to reach 1.14 billion by end-2007, driven by robust growth in emerging markets.

According to Frost & Sullivan officials, The impact of the emerging markets on the rest of the region is likely to grow in significance as regional carriers search for sustainable growth, and as economies of scale further drives down 3G handset prices. Of the expected 190 million net subscriber additions in 2007, 90.8% is likely to stem from the emerging markets, officials said.

With most major cities in emerging markets reaching high mobile saturation rates, the focus rests on increasing mobile penetration in rural areas and the lower-end segments in the next three to five years. The series of price cuts in voice minutes and the introduction of low-entry one-nation call rate plans in 2006 prove that raising the affordability rates among the masses is increasingly important to penetrate into the lower-end market, which holds strong growth potential for Asia's cellular industry.

Mobile broadband is likely to be the next killer application in Asia's promising mobile landscape. However, given its limited bandwidth, the current 3G network may not necessarily be the ideal technology for mobile broadband. The business case for 3G may not lie in 3G itself, but in 3.5G or commonly known as high speed downlink packet access (HSDPA), as 3G ultimately provides a platform for enabling 3.5G. HSDPA and WiMAX (worldwide interoperability for microwave access) are expected to play a prominent role in 2007, given the number of trials that have taken place in 2006, the report said. These, together with pending issues such as fixed-mobile convergence, mobile number portability, and mobile broadband, are believed to be the major factors that can potentially change the competitive landscape of the telecommunications industry, the study added.