Cellular services revenue to cross $37 bn by 2012

This growth is poised to continue through the forecast period and India is expected to remain the world's second largest wireless market after China in terms of mobile connections, Gartner said.     

"The growth in the mobile subscriber base is on the back of a rapidly proliferating rural market, lower handset costs, and low tariff rates in the Indian market," said Madhusudan Gupta, Senior Research Analyst, Gartner.     

"Rural telephony will continue to trigger growth and is expected to grow four fold during the forecast period. Call rates... Drop to about 1.5 cents per minute narrowing the gap with fixed-line rates. These factors along with an increasing competitive landscape will fuel market growth and encourage the adoption of wireless services in the rural and semi-urban provinces of India," the company said.     

Cellular market penetration is projected to increase from 19.8 per cent in 2007 to 60.7 per cent in 2012.      

According to Gartner analysts, the growth could be primarily attributed to the increasing focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment along with lower handset prices.    

Vendors would continue to focus on sub-255 handsets to capture market share, they added.