India, China Will Have Most Cellphone Users By 2006

Imagine four neat stacks of cellular handsets; each as tall as Mount Everest. It is a little difficult to conjure the image, but that is the number of cellphones that India is expected to have in 10 years. The precise number: 112.35 million, says a telecom thinktank. Mind-boggling isnt it? compared to the current market of about 300,000.

Mark Lowenstein, vice-president (wireless and mobile communications) of Yankee Group, a telecom and information technology constancy based in Boston, United States, predicts that China and India will together account for 28 per cent of the global mobile communications market pegged at some 835 million subscribers in 2006. This number translates into a compound aggregate growth rate of 20 per cent over the current 135 million cellphone users in the world.

 

China is projected to lead the Asia Pacific market for mobile services with about 120 million subscribers by 2006. The Indian and Chinese markets will be way ahead of todays advanced telecom markets like Japan (80 million by 2006), South Korea (a little more than 15 million) and Hong Kong (just 2.78 million). Asia Pacific defined as Japan, Singapore, Australia, Hong Kong, Taiwan, South Korea, Malaysia, Thailand, China, Indonesia, Philippines and other countries in the region as a whole will account for almost half of worlds mobile phone users, up from 34 per cent now.

To put the Indian and Chinese numbers in perspective, look at the projections for North America and Western Europe. North America is expected to have 150.3 million subscribers (18 per cent marketshare) in 2006 and Western Europe 142 million (17 per cent). These two regions now have 32 per cent (43.2 million subscribers) and 26 per cent (35 million) respectively.

The Yankee Group projections make for interesting copy. At a presentation made before the just concluded Second Annual CDMA (code division multiple access, a modulation technique used in wireless communications) Congress in Singapore, former journalist Lowenstein said revenues from mobile telecom services would pierce the $500 billion (Rs 18,00,000 crore) mark by 2006. The revenues currently are about $100 billion (Rs 3,60,000 crore) and are projected at $300 billion (Rs 10,80,000 crore) by 2001.

The consulting companys cellphone penetration (number of handsets per 100 people) projections would warm the hearts of many policy mandarins. India is expected to have a cellular penetration of 10.13 per cent. The present cellular penetration in the country is 0.03 per cent and that of fixed-line or basic telephones is about 1.5 per cent.

On technology, Lowenstein did not have very heartwarming news for participants at the CDMA Annual Congress. He said cellphone users hooked on to CDMA-based wireless systems (which, claim manufacturers, work out to be 40-50 per cent less expensive than comparable systems) will account for less than 20 per cent of the market by 2006 (up from the current 1 per cent). CDMA vendors have been predicting a 45-50 per cent marketshare by then.

The European GSM (Groupe Special Mobile, the only digital cellular standard allowed in India) will continue to dominate the industry with over 50 per cent of the market (currently 25 per cent), the Yankee Group analyst said.