Mobile connections in the country are expected grow by 27.3% in 2010 at over 660 million, says Gartner. This will be mainly because of operators? growing focus in rural areas and low prices of handsets. Gartner estimates the mobile services revenue to reach $19.8 billion by the end of the year, up 19.7% from 2009.
?The arrival of new players in the Indian mobile sector has led to a fierce competition which has sustained the strong subscriber growth we saw in 2009. A majority of these subscribers will be from rural areas,? said Neha Gupta, senior research analyst, Gartner.
As per the Telecom Regulatory Authority of India, (Trai), the total subscriber base as on May 31, 2010, stood at 617.53 million with a tele-density of 55.38%. Gartner expects the mobile penetration to touch 55.9% in 2010.
However, this phenomenal growth in the mobile connections will not salvage the fall in revenues. ?Expect a dramatic decline in growth of voice revenue from 2010 until the end 2014. While the mobile connections are growing at a CAGR of 11%, voice revenues are experiencing a meagre growth of 3%,? she added. ?Increased data adoption will bring some relief to the declining revenues, however, this would not offset the fall,? she explained.
Gartner points out that the telecom sector is likely to experience consolidation over the next 18 months, as the launch of 3G services enables service providers to distinguish themselves on services offered rather just on prices.
?The increase in competition in the Indian mobile market has led to price wars, which have, in turn, led to a decline in voice average revenue per user (ARPU), and we expect this trend to continue as service providers increasingly shift their focus to rural areas,? she said.
Further, the mobile services revenue is expected to exceed $23 billion and India is expected to remain the world?s second largest wireless market after China in terms of mobile connections, Gartner said.