3G subscribers in India to reach 400 million by 2015: Wireless Intelligence
The numbers of 3G subscriber connections in India are predicted to reach 400 million by 2015, representing almost 30 percent of the country’s total, stated a study conducted by Wireless Intelligence. The study - India 3G rollout (forecasts and market shares 2011 – 2015), highlighted that 3G connections are set to grow three-fold between 2011 and 2015. Indian operators spent a combined US$15 billion in acquiring WCDMA 3G spectrum at auction last year and will jointly invest a further US$2.5 billion in building the new networks and rolling out 3G services in 2011. Seven Indian operators acquired 3G spectrum last year in addition to the two state-owned operators (BSNL and MTNL).
“Market share growth clearly depends on how fast operators can deploy 3G networks in their respective licensed areas, and how rapidly they can address demand in rural areas. Nevertheless, 3G will remain a niche market for some time in India, and 2.1GHz networks will initially be mainly used to improve voice quality and reduce congestion in existing 2G networks,” observed Joss Gillet, senior analyst, Wireless Intelligence and author of the report.
The study notes that over 80 percent of 3G connections will be based on WCDMA in five years, with the remaining 20 percent on CDMA-based 3G networks. Reliance Communications and Tata Teleservices (TTSL) are in the process of migrating to GSM/WCDMA. As per the study, the two operators are set to command 3G market shares of 39 percent and 30 percent, respectively, this year.
However, 2011 has seen more operators jumping into the bandwagon – Bharti (in January), Aircel (February) and Vodafone (March). The company insists that all new WCDMA-based operators will have launched services by June 2011, which means by 2015, 3G market shares will more closely resemble the overall national picture. Bharti – India’s largest operator - is predicted to command the largest 3G share (18 percent).
The study observes that India’s circle A and circle B service areas will account for 75 percent of the country’s 3G connections by 2015. Even though initial 3G rollouts are concentrated in metro (Mumbai, Delhi, Chennai, Kolkata) they will soon be outstripped by fast-growing demand for 3G in more populous regions such as Punjab, Bihar, Andhra Pradesh and Haryana.
However, no 3G operator is able to offer a nationwide service, which will require network sharing and roaming between operators. Pricing 3G services appropriately in a market where around 200 million prospective users live on less than US$2 a day is also set to be a major challenge.
Gillet further added that, “Even though we do not anticipate a price war in the 3G space, profitability will take time due to the high investments required and the current need for additional spectrum. While network-sharing deals will help speed-up the adoption of 3G services and increase economies of scale, it is clear that device availability and affordability will have a more immediate impact on demand in such a price sensitive market dominated by prepaid users.”
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