Mumbai: Cellular subscriber growth in India will exceed all other Asian countries over the next ten years, according to the latest JP Morgan research report on the telecom industry in India. The report says that the fastest growth will be over the next three years when the sector is likely to witness a CAGR of 65 per cent. Driving this growth will be falling costs: of airtime, connection and handsets. Basing its conclusion on an affordability-based bottom-up analysis, the report further says that India easily has the potential for a 114-million cellular subscriber base (or a penetration of 8.8 per cent) by 2010, with pre-paids accounting for 78 per cent."The sector (cellular) has already already hit an inflection point. The acceleration in subscriber growth discernible in the past 12 months will now gather momentum, driving cellular subscriber CAGR over the next three years to 65 per cent- the highest in Asia," says JP Morgan's January 15, 2001 report. The report lists "an easing regulatory environment" and an "assumption of increased competitive pressures" as the main drivers of growth.
"(These factors) drive our forecasts of the affordability factor for cellular which will double by the year 2002," the report states.Much of the subscriber growth will accrue from a reduction in entry cost.
"China has been a leader in aggressively eliminating the first time connection fee to induce subscribers to sign on. And this has been the main driver for growth there," the report explains.
A further boost is likely to come from dramatically falling handset prices according to the report.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
