India surpasses 500 mn unique mobile subscribers

GSMA says that by 2020 the number will grow to a staggering 734 mn

India is on track to surpass half a billion mobile subscribers by the end of the year, according to a new GSMA study.

India had 453 million  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, said the study.

The report ‘The Mobile Economy: India 2015’ said that this strong growth is linked to India’s relatively low mobile subscriber penetration rate, which stood at 36 per cent of the population at the end of 2014, compared to a 50 per cent global average.

The subscriber penetration rate in India is forecast to reach 54 per cent by 2020. The report also finds that 13 per cent 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.

"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," said Alex Sinclair, Acting Director General and Chief Technology Officer at the GSMA. "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."

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.

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 per cent of Indian mobile connections in 2014, but are expected to make up 42 per cent 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 Rs 7.7 lakh crore ($116 billion) to the Indian economy in 2014, equivalent to 6.1 per cent of India's total GDP. This contribution is forecast to almost double to Rs 14 lakh crore by 2020, which would represent 8.2 per cent 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 Rs 1.1 lakh crore ($16 billion) in 2014 in the form of taxation and spectrum auction payments.