‘Cellular market will be 34 m by 2006’

NEW DELHI: India's mobile phone market, currently at a little over five

million subscribers, is expected to soar to 34.1 million by March 2006, ABN Amro

said in a recent research report. The country, the world's second-most populous

after China with a population of over a billion people, had 5.011 million mobile

phone subscribers at the end of October.

Although the market has grown over 90 per cent over the past one year,

analysts say the absolute numbers are still way short of China's subscriber base

of over 120 million users. "As a number of factors such as an improving

regulatory environment, increased disposable income and falling handset prices

work in combination, the market approaches the cusp of hyper growth levels on an

absolute basis," ABN Amro said in the report dated November 7. It estimated

the number of mobile phone users to cross 25 million in 2005 and to rise to 77

million by 2010.

ABN Amro said it expected the market to expand at a 57 per cent compounded

annual growth rate (CAGR) for the next five years. India's fixed-line business,

which had 32.4 million lines at the end of March, was expected to grow at 15 per

cent CAGR to touch 66.5 million lines by March 2006, the report said.

ABN AMRO's mobile users' growth forecast for 2005 is lower than that by

technology research firm Gartner which expects the subscriber base to grow to

30.9 million by 2005. The brokerage said it expected growth in the mobile

business to be led by the pre-paid segment as it attracted the mass market or

the lower rung of users.

While a higher proportion of pre-paid users would drag down the average

revenue per user (ARPU), it would be offset by strong growth in the number of

subscribers, ABN Amro said. ABN Amro said the two main cities of Bombay and New

Delhi would continue to lead the country in mobile phone penetration over the

next few years. It expected growth to be strongest and most immediate in the

five "A" category circles and said "B" and "C"

category circles were longer-term bets.

India's telecoms market is divided into "metro" and "A",

"B" and "C" circles or zones, based on subscriber potential.