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India is Number Two Mobile Phone Market

By the end of September 2010, there will be five hundred million mobile subscriptions in India, according to the latest market study by Informa Telecoms & Media.

The speed of growth has been remarkable. While it took 13 years for India to gain its first 250 million mobile subscriptions, forecasts from Informa indicate that the country's second 250 million subscribers will be added over a 30-month period.

The engine for this rapid growth has been the increased competition in India's mobile market, which has been driven by tremendous consumer demand, and has resulted in heavy investment from the country's largest operators.

"The bottom line is with a penetration rate of 26 percent, India is a hugely attractive investment destination, and will continue to be so for many years. Indeed, our forecasts suggest that the active subscription rate will remain well below 50 percent until 2010," says Informa Principal Analyst, Nick Jotischky.

Not only is India now the world's second largest mobile market worldwide, but it is also the second fastest growth market after China. During the first six months of 2008, there were over 50 million net additions to India's mobile market -- behind China on 53.6 million additions.

Compare this with saturated markets such as UK and France, where the number of net additions was 410,000 and 535,000 respectively.

Growth in India's mobile market is being driven by more than just heavy investment. As Jotischky explains "India has the world's lowest tariffs and supplies some of the cheapest handsets, both factors that have helped to drive consumer demand. Increased network coverage as operators expand their population coverage to rural parts of India has also played its part."

Informa forecasts also suggest that India will soon enter a second phase of growth.

The Indian regulator is set to award 3G licenses to India's largest operators in 2009 and Informa forecasts suggest a rapid take-up on the back of growing demand for data services. At the end of the decade, Informa predicts there will be 7.5 million W-CDMA connections by the end of 2010, a figure that will leap to over 120 million by the end of 2013.

The award of 3G licences will be important to India's leading operators as this will allow them to differentiate their service offerings from those of their competitors as well as provide them with much-needed additional spectrum.

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