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India Telecommunications Report Q1 2012
Business Monitor International, Dec 2011, Pages: 147
Business Monitor International's India Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's telecommunications industry.
BMI's Q112 report on India's telecommunications market provides a comprehensive overview of the latest developments to occur within the country's mobile, fixed-line telephony and internet sectors. During this quarter, sees BMI's five-year growth forecasts for these different sectors extended through to the end of 2016. BMI has also revised its forecasts to reflect the latest data from by the Telecom Regulatory Authority of India (TRAI), as well as from some of the country's largest telecoms operators, namely Bharti Airtel, Vodafone India and Reliance Communications.
BMI has revised and extended its forecasts for India's mobile telephony market to the end of 2016. The latest data released by the TRAI showed there were almost 852mn mobile subscribers at the end of June 2011, representing an increase of 4.9% q-o-q and 34.0% y-o-y. In H111, India's mobile market expanded by 12.8%. Based on this trend, BMI estimates that full-year growth was just over 26%. This allows for slightly stronger growth in the second half of the yearH211.
In 2012, BMI expects mobile market growth to fall to around 18%. The slowing growth trajectory envisaged by its forecast takes account of the slowdown in urban subscriber growth. At the same time, the pace of Indian mobile operators' rural expansion plans remainsis moderate. By the end of its newly extended forecast in 2016, BMI anticipates a total market of someabout 1.593bn mobile subscribers.
A revised and extended ARPU forecast for India's mobile market is based on new ARPU figures, published by the TRAI, for the end of June 2011. The TRAI reported that India's blended GSM and CDMA ARPUs fell to INR98 and INR64 respectively in June 2011. This was down from INR105 and INR68 respectively in the quarter ended December 2010. One of the main developments which are expected to have a positive impact India's ARPU levels through to 2016 include the launch and continued expansion of premium 3G services. By the end of 2012, BMI predicts that India's blended GSM ARPU should to reach INR87.5. BMI expects this to fall to around INR81.5 by 2016, based on the expectation of a slowing rate of decline. Similarly, it forecasts the country's blended CDMA ARPU to reach INR57.8 from 2012 and fall to INR52.8 as of 2016.
Meanwhile, the TRAI reported that India had 20.3mn internet subscribers at the end of June 2011. The number of broadband subscribers totalled 12.35mn in June, equivalent to 60.7% of the total internet subscriber base. According to BMI's newly extended broadband forecast, it expects strong subscriber growth to 2016, as the sector continues to benefit from the public and private support. BMI forecasts a market of almost 16.9mn broadband subscribers at the end of 2012 and now forecastpredict that this number will increase to 38.3mn by 2016; this is equivalent to a penetration rate of almost 3%.
Recent noteworthy developments of note include the news in October that India's government had unveiled a draft version of the country's National Telecom Policy 2011. The raft of plans announced by the government are aimed at modernising the Indian market;. tThey include guidelines on permitting cellcos to share spectrum, allowing consolidation viathrough M&A activity, the release of 300MHz of additional spectrum in 2017 and a further 200MHz in 2020, and forcing operators to provide roaming between the country's telecoms 'circles'.
Meanwhile, the dispute between the government and several privately-owned operators gravitated to a new level in November 2011 when Bharti Airtel, Vodafone India, Idea Cellular and Tata Teleservices demanded that their 3G licence fees should be returned if the government maintained its view that their intra-circle roaming pacts were 'illegal'. In October, 2011 a division of India's Department of Telecommunications (DoT) reportedly ruled that the roaming agreements struck between Bharti, Vodafone and Idea for their respective 3G networks were 'illegal'. Should the government act on its recommendations, the cellcos involved could face fines of INR500mn (US$10mn) in each circle where they already have 3G roaming agreements. Airtel, Vodafone and Idea signed agreements, according to under which each would allow each other access to their respective 3G infrastructure, in effect allowing all three to offer pan-India third-generation3G services, in July 2011.
India continues to sit in 10th place in BMI's telecoms business environment ratings for the Asia Pacific. The country scores below the regional average in all of the categories surveyed by BMI, except for the Industry Rewards segments.
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