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India's Wireless Market Development Strategy

Last year China surpassed the U.S. in DSL broadband service subscribers, and that event certainly shifted attention to the emerging Chinese communications market opportunity. Another emerging market that is worthy of deeper analysis and assessment is within India.

The trends in the Indian marketplace will create some unique challenges, but that doesn't negate the huge opportunity for device manufacturers and network service providers to adapt to the economic nuances of this nation. Again, I believe that consumer segmentation and selective targeting strategy can help to create value that fits the market opportunity.

The wireless phone subscriber base in India has already crossed the 100 million mark and will more than double to 265.2 million by 2010, reports In-Stat.

Providers will continue to rake in profits, however, Average Revenue Per User (ARPU) levels have declined significantly, and the downward trend is expected to continue, the high-tech market research firm says.

"The primary growth drivers for the subscriber base include the fact that India is an under-penetrated market, low tariff structure, increasing ability of the population to afford mobile communication services, and rapid network expansion by operators," says Mayank Jain, In-Stat analyst.

Recent research by In-Stat uncovered the following:

- ARPU in India is one of the lowest in the world and is expected to decline further to $5.60 by 2010.

- The prime reason for the decline in ARPU is the downward trend in tariff structure for subscribers due to intense competition.

- The leading operators are Bharti Airtel, BSNL, Reliance, Hutchison, and Idea Cellular. Combined, these players accounted for about 84 percent of the subscriber base in 2005.

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