India's cellphone market rise highest in Asia-Pacific

The Indian cellular services market is projected to reach $24 billion by the end of 2009, recording a compounded annual growth rate (CAGR) of 35.6 per cent, consulting firm Gartner has announced.

The firm also said that the Indian cellular services market had recorded the highest growth in Asia Pacific and Japan region in 2004 with a CAGR of 67 per cent.

It has also predicted that the Asia Pacific and Japan cellular services market would reach $225 billion in 2009, with a CAGR of 6.2 per cent from 2004, and that the Indian cellular market would account for 11 per cent of the overall Asia Pacific and Japan market by 2009.

"The cellular industry is a mass market phenomenon that relies on economies of scale. Time to market advantage is critical and favours those who follow aggressive network expansion. In the forthcoming years, the capability and capacity to invest in penetrating semi-urban and rural markets will be important determinants for increasing market share and creating sustainable businesses in the Indian cellular marketplace," said Kobita Desai, principal analyst, Asia Pacific for Telecom at Gartner.

According to Gartner, by 2009, the Indian market will increase cellular penetration levels to 30 per cent, netting more than 300 million connections.

Overall penetration and market opportunity will increase, but with thinner margins, it said.

The firm advises operators to prepare themselves to work in business environments where ARPU levels are expected to be as low as $5 per month in the next 18-24 months. Operators will struggle to find a balance between yield (income/earnings/margin) and growth to fulfill growth expectations, it added.