India to reach 500m mobile subs by year-end

eGov Innovation editors
eGov Innovation

India is on track to surpass half a billion mobile subscribers by the end of the year, signaling the dawn of a new era for the nation's mobile economy, according to the GSMA.

A report from the industry group found that 13% of the world’s mobile subscribers reside in India and that subscriber growth is forecast to outperform the regional and global averages over the coming years as the country cements its position as the world’s second-largest mobile market behind China.

The study also highlights how the Indian mobile industry is rapidly migrating to new mobile broadband networks, services, and devices, and becoming a key enabler of the government’s ‘Digital India’ initiative aimed at providing broadband connectivity to all.
 
“India is a unique mobile market and one where the mobile ecosystem is playing a hugely influential role in transforming the lives of its citizens, and driving economic growth,” GSMA acting director general and CTO Alex Sinclair said.

“The market is now rapidly migrating to mobile broadband technology, which is providing a platform for India to transform into a digitally empowered society and connect many millions of unconnected citizens to the internet over the coming years.”

India had 453 million unique mobile subscribers at the end of 2014. It is forecast to surpass 500 million by the end of this year and add a further 250 million subscribers by 2020 to reach 734 million, accounting for almost half of all the subscriber growth expected in the Asia-Pacific region over this period.

This strong growth is linked to India’s relatively low mobile subscriber penetration rate, which stood at 36% of the population at the end of 2014, compared to a 50% global average. The subscriber penetration rate in India is forecast to reach 54% by 2020 as many millions more are connected by mobile.

Although India only launched 3G services in 2009 and 4G deployments are at an early stage, the move to mobile broadband networks is set to gather pace over the coming years. Mobile broadband networks (3G/4G) accounted for only 11% of Indian mobile connections1 in 2014 but are expected to make up 42% of the total by 2020.

In a little over five years since the launch of the first commercial 3G networks, Indian mobile operators have extended 3G network coverage to three-quarters of the population.

One factor driving the migration to mobile broadband networks is the increasing adoption of smartphones, which has been fuelled by a raft of low-cost smartphones from both international vendors and, increasingly, via a homegrown smartphone manufacturing ecosystem.

Several international device vendors have set up manufacturing facilities in India, supporting the government’s ‘Make in India’ initiative aimed at boosting local manufacturing. More than half a billion new smartphones connections are expected in India between 2015 and 2020, bringing the total to 690 million, up from 149 million in 2014.
 
India’s mobile industry is also a key driver of economic growth and job creation. The industry made a total contribution of 7.7 trillion rupees ($116 billion) to the Indian economy in 2014, equivalent to 6.1% of India’s total GDP3. This contribution is forecast to almost double to 14trillion rupeees by 2020, which would represent 8.2% of projected GDP by that point.

The industry directly and indirectly supported 4 million in jobs in the Indian economy in 2014, a figure predicted to rise to 5 million by 2020. It also makes a highly significant contribution to the funding of the Indian public sector, contributing approximately 1.1 trillion rupees ($16 billion) in 2014 in the form of taxation and spectrum auction payments.

Launched in July 2015, the Digital India initiative, aims to transform India into a digitally empowered society and provide broadband connectivity to all.

“The Digital India program is a unique opportunity for India’s government and mobile industry to work together on a common agenda to transform the country into a digitally powered society and economy,” added Sinclair.

“Ensuring high-quality, widely available and affordable mobile broadband will be critical to delivering this ambitious vision, which will require a regulatory framework and approach to spectrum that encourages investment and innovation.”

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