India’s mobile subscriber base will reach 1.36 billion by 2020
By Sourabh Kaushal, Analysys Mason
16 December 2011 – The Indian mobile market is forecast to grow from 812 million connections (SIMs) in at the end of 2011 to 1.36 billion in 2020, at a CAGR of 5.9%, according to the latest report from Analysys Mason entitled The Indian mobile market: forecasts and analysis 2011–2020. Of these connections in 2020, 3G and 4G technologies are expected to account for 57.1% and 10.7%, respectively. However, unique mobile user penetration will only reach 54.0% in 2020, up from 34% in 2011, due to affordability constraints in rural areas.
“Operators need to understand the multiple-SIM phenomenon and inactivity drivers in emerging markets in order to evaluate their true revenue potential,” says Sourabh Kaushal, Lead Consultant at Analysys Mason. “The current market structure has resulted in a high proportion of multiple SIMs and inactive users, which camouflages the country’s actual teledensity and makes it difficult to evaluate the market’s true revenue opportunity.”
Currently, 30% of SIMs are inactive, which results in significant loss to operators, because insufficient revenue is generated as compared to the customer acquisition cost incurred. Therefore, operators need to shift their focus from customer acquisition to retention in order to optimise their spend on sales and distribution.
“With decreasing or flat voice ARPU, non-voice ARPU becomes critical for driving revenue growth. In order to drive adoption of value-added services, operators need to control the entire user experience throughout the customer lifecycle process,” says Kunal Bajaj, Director at Analysys Mason. “In addition, operators need to ensure user loyalty by tracking customer usage behaviour and suggesting possible upgrades or other relevant applications and services.”
Until 2012, adoption of 3G services is expected to be limited, primarily because of costly 3G data plans and the high cost of entry for 3G enabled handsets. However, from 2013, operators are expected to migrate 3G-capable handset users to 3G networks, resulting in high adoption of these services.
“Because of the focus on voice services and handset-based data connectivity, data-only SIMs account for only 1% of all SIMs. This is also limited because of the low penetration of mobile data devices such as laptops, netbooks and tablets, and the high cost of owning data-only SIMs and dongles,” says Pankaj Agrawal, Associate Director at Analysys Mason. “However, with the increase in device-service bundling initiatives by operators and reduced data tariffs, the number of data-only SIMs is expected to grow to about 84 million in 2020, with growth accelerating after the launch of 4G services in 2013.”
This report provides a detailed ten-year forecast of the Indian mobile market by operating region (or ‘circle’), based on our in-depth market understanding, validated by inputs from multiple industry participants and benchmarked against our knowledge of worldwide markets. It includes forecasts of the number of voice and data service users, and of the number of data-only device users, as well as key metrics such as average revenue per user (ARPU), minutes of use (MoU) and revenue per minute (RPM) by circle. ♠ JC