India Mobile Services Market to reach US$30 bn by 2016: Gartner

Indian telecommunications industry to get into the cheer circle as their average revenue per user (ARPU) would get better by 2016. India Mobile Services Market is projected to reach USD 30 billion by 2016, forecasted a study by Gartner. The ARPU began to stabilize in 2011 which had a double digit decline between 2008 and 2010.

The study stated that the mobile subscriber base would reach 696 million connections in 2012, up by 9 percent from 638 million in 2011. And this growth is driven by the expansion of mobile services in semi-urban and rural markets and the availability of cheap mobile devices.

“The industry is pegging its hope on market consolidation, which appears imminent in the aftermath of 2G license cancellations. Department of Telecom and Telecom Regulatory Authority of India have a pivotal role to play in removing uncertainties in policy-making, and license and spectrum management, so that the mobile operators can focus their energies on driving growth,” said Shalini Verma, principal analyst, Consumer Technology and Markets, Gartner.

While Indian mobile operators have demonstrated 'out of the box' thinking in IT and telecom infrastructure management to check operational costs, they have their work cut out to improve margins, by converting prepaid subscribers into postpaid, said the study.

Broadband

Mobile data revenue has tremendous growth opportunities in India because of low internet penetration. While fixed broadband is becoming a norm in several countries, India is lagging behind even emerging markets in fixed broadband penetration. India's fixed broadband household penetration was 6 percent in 2011, which is lower than the overall penetration in emerging markets (estimated at 16 percent in 2011).

With consumers perceiving mobile broadband as a basic necessity, mobile operators globally are reaping their investments in infrastructure through an increase in mobile data revenue. However, in India mobile operators have significant challenges, given the pragmatic nature of the emerging middle class with regards to their IT products and services spending.

India could become the testing ground for innovative delivery and pricing models that could be replicated in other emerging markets. Mobile operators will need to focus on sound fundamentals such as improving the quality of service of mobile broadband.