Wireless Subscriber Base in India Breaks 250-mil. Mark at End-February

According to the Telecom Regulatory Authority of India (TRAI), a total of 8.49 million telephone connections (landline and wireless) were added during February 2008 (the number of landline connections decreased slightly), as compared to 8.74 million connections added in January 2008. The total number of telephone connections stood at 290.11 million at the end of February, while the overall teledensity reached 25.31%.

In the wireless segment, 8.53 million subscribers were added in February as against 8.77 million subscribers added in the previous month. The total wireless subscribers (GSM, CDMA & fixed WLL) base stood at 250.93 million at the end of February 2008.

In the landline segment, the subscriber base slightly decreased to 39.18 million at the end of February as against 39.22 million subscribers at end-January. The number of broadband subscribers reached 3.47 million by end-February as compared to 3.24 million a month earlier.

Outlook and Implications

• India to Become Second-Largest Mobile Market by Subscribers: With a total wireless subscriber number already above 250 million and an average monthly addition of eight to nine million, India is likely to overtake the United States to become the world's second-largest wireless market in terms of subscribers after China by the end of April 2008. According to CTIA (an association of wireless operators in the United States), the United States currently has about 256 million wireless subscribers and adds about 2-3 million subscribers a month. According to China's regulator, the Ministry of Information Industry (MII), China had 565 million mobile subscribers at end-February after adding more than 9 million mobile subscribers in February.
• Top Six Operators Control Over 90% of Total Wireless Subscriber Base: Bharti Airtel continues to lead the wireless market, with a subscriber base of 59.67 million at end-February and a market share of 23.8%. Reliance Communications, the number-two mobile operator, controlled 17.6% of the market, with 44.18 million subscribers. It was closely followed by Vodafone-controlled Vodafone Essar, which had 42.56 million subscribers and a market share of 17.0%. State-run BSNL claimed the fourth spot in the wireless market, with 38.90 million subscribers and a market share of 15.5%. Tata Teleservices had 23.40 million subscribers and Idea Cellular had 22.87 million, giving those companies market share of 9.3% and 9.1%, respectively. The top six mobile operators together controlled about 92% of the country's total wireless subscriber base. They were followed by Aircel (10.19 million), Spice (4.08 million), state-run MTNL (3.40 million), BPL Mobile (1.28 million), HFCL Infotel (290,703) and Shyam Telelink (104,866).
• Competition and Market Entry Opportunities: The government's recent move to allow new players to enter the market will significantly increase competition in the long term. Following the recent round of unified access service (UAS) licence allocation, five more companies now hold pan-Indian licences. These include industry newcomers Videocon-controlled Datacom and realty major Unitech, as well as existing operators Ideal Cellular, Shyam Telelink and Tata Teleservices. Spice, Loop Telecom, S Tel and Swan Telecom have also received licences for various service areas (see India: 5 March 2008: DoT Issues More New Licences; Licensing Expected to Finish Tomorrow). Some of the new licensees may be interested in introducing strategic partners to raise capital to fund large-scale network roll-out as well as to borrow experience from leading foreign telcos—providing opportunities for foreign telcos to enter the market. The government's decision to allow both existing telecoms service licensees, as well as new players, including foreign telcos, to participate in 3G licence auctions in the future, will offer another market entry route (see India: 24 March 2008: DoT to Open India's 3G Auction to New Players, Foreign Telcos).

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