India mobile users to cross 660 mn in 2010: Gartner

Mobile connections in India will cross 660 million, growing at 27.3 per cent in the current year according to Gartner, an information technology research firm. Also the revenue from mobile services is expected to reach $19.8 billion by the end of the year, up by 19.7 per cent from last year.

The penetration of mobile connections in India at the end of 2009 stood at 44.5 per cent which is expected to reach 55.9 per cent by the end of 2010 according to Gartner.

The firm expects the Indian mobile industry to clock a double-digit growth rate till the end of 2012. The penetration of mobile connections is projected to reach 72.5 per cent by 2012 and 82 per cent by 2014. An increased focus by the service providers on the rural market and lower handset prices will be mainly responsible for the greater reach of mobile services in the country.

The total revenue generated from mobile services in India is forecasted to exceed $23 billion by the end of 2014.

With such growth projections for the sector, India is expected to remain the world’s second largest wireless market after China in terms of mobile connections.

Despite such an overall positive outlook for the sector, Neha Gupta, senior research analyst at Gartner feels that the Indian mobile services market is going through a state of flux, with the arrival of many new players leading to a decrease in price points for the industry.

The recently completed government auction of 3G and Broadband Wireless Access licenses have lead to an increase of capital expenditure by several operators. This in turn will increase the net debt at the industry level. However a growth in the subscriber base and revenues is expected to increase the operating cash flows.

“The increase in competition in the Indian mobile market has led to price wars which have in turn led to a decline in voice average revenue per user (ARPU), and we expect this trend to continue as service providers increasingly shift their focus to rural areas,” Gupta said. “Expect a dramatic decline in growth of voice revenue from 2010 until the end 2014, although this will be balanced by increased revenue from data services which will significantly contribute to the overall growth of mobile services in India.”