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India Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: September 2009 Product Code: R302-8132 Description Our latest update on India’s telecommunications market assesses the impact of several recent developments on the country’s fixed-line, internet and mobile telephony sectors. Recent developments,which include impressive rates of subscriber growth, increased competition and ongoing investments in the expansion of network infrastructures, are also reflected in our newly updated forecasts. This quarter,the most notable forecast changes have occurred in the mobile segment.India’s mobile subscriber base grew by 12.9% in the first three months of 2009. The stronger than expected growth has led us to revise our growth expectations for the rest of the year. We now predict that the market will expand by 49.8%, enabling the penetration rate to rise to almost 44% at the end of 2009. We now expect the mobile customer growth rate in 2009 to surpass that of 2008, which saw the market expand by 48.5%. One of the main reasons for our strong growth expectations is the intense competition that has emerged between India’s mobile network operators. In addition to market leaders Bharti Airtel, Reliance, Vodafone and BSNL, operators such as Idea Cellular and Tata Teleservices are steadily increasing their share of the market. Several new entrants are expected to challenge the position of these market leaders over the next few months. Among them are the Indian mobile businesses of major international operators such as Bahrain’s Batelco, Norway’s Telenor and Russia’s Sistema. Although we have raised our growth expectations for India’s mobile market as a whole, we have lowered our estimate for the number of 3G customers at the end of 2008. Our new estimate reflects evidence of weak growth from India’s two state operators, BSNL and MTNL which soft launched their 3G servicesin late 2008. By June 2009, MTNL reportedly had around 1,000 3G customers, much less than originally anticipated. Our new 3G forecast also reflects the continued delays that have characterised the process to issue next generation mobile licences. In June 2009, it was announced that the Indian government had settled on a price for 3G licences. However, in mid-July, the Indian government revealed that it had convened a group of ministers to further look into both pricing and spectrum availability for 3G services. The group of ministers is specifically tasked with deciding on the number of operators allocated licencesin each circle, as well as finalising the reserve price for both 3G and WiMAX auctions. Despite the fact that its scores have changed in a number of ratings categories, India remains in eighthplace in our latest set of Business Environment Rankings for Asia. Although India’s telecoms marketscore has dropped slightly, it nevertheless continues to have the second highest telecoms market rating in the region. A lower score for regulatory independence reflects the ongoing delays that have affected the 3G licensing process. However, the lower score in this category has been counterbalanced by a higher score for Country Risk; the higher score is largely a reflection of our more upbeat view of India’s economic growth prospects. Table of Contents
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