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India’s great growth in mobile

18 October 2011

With the expectation of more than 6 billion mobile phones globally in 2011, IET president Dr Mike Short, vice president of Telefonica Europe, says we will need to take key lessons from both India and China as the largest mobile markets in the world

From my earliest visits to India 20 years ago I have always been fascinated by how much we can learn from this great country. We see today that India has one of the fastest growth rates in modern telecommunications, and high levels of innovation in mobile, the Internet and software systems in particular.

By the end of 2010 according to IDATE India had already reached 734 million mobile subscribers, and phenomenal growth rates up from 237 million (2007) 347 million (2008) and 525 million (2009). There are no other countries that have grown by more than 200 million customers in one year!

Even with a population of 1.173 billion or 1/6th of the world’s population some have even suggested that India may one day overtake the bigger country of China who had already reached 861 million mobile subscriptions by the end of 2010.

Market characteristics

Numbers alone do not tell the whole story, but some key characteristics do illustrate the market further:

• The ratio of mobile to fixed line (FL) is 18:1 with barely 35.5 million fixed lines available in India (equivalent to 3.0 per cent of the population with FL penetration). This contrasts to China's 3:1 ratio (equivalent to 22.3 per cent of the population with FL penetration), or for the UK 8:3 (equivalent to 50.6 per cent of the UK population with FL penetration). Source IDATE.
• The total spend/head on mobile services is much lower than all the G8 nations largely due to very low GDP, which is less than 1/4 of China and 1/10th USA GDP totals. The mobile spend/head is less than 14 Euro/subscription per annum or 1/4 and 1/16 of China /UK respective levels of annual spend.
• There are already many Internet and content and video/Bollywood based services companies where smartphones will really help these to develop growth even further.
• The low revenue per head has meant significant risk/reward contracts for Infrastructure and value added services. These provide a hotbed for new business models and new styles of innovation.
• India is only just starting with 3G, but it is expected that the higher speeds and capacity offered will generate new Internet services that the low-fixed landline/broadband penetration just cannot support The software capability when more fully unleashed is expected to develop many new mobile applications and connected solutions in new areas such as healthcare or eHealth, and education or eLearning.

Global innovation

With the expectation of more than 6 billion mobile phones globally in 2011 we will need to take key lessons from both India and China as the largest mobile markets in the world, given their huge scale, and influence on design, standards, manufacturing, software, services and solutions. We are all innovators in mobile services now.

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