Indian cellular market to reach $24 B by 2009

By agencies   |   Wednesday, 31 August 2005, 07:00 Hrs
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MUMBAI: Indian cellular market is expected to grow at a compounded annual growth rate (CAGR) of 35.6 percent to reach $24 billion by 2009.

The Indian cellular services market recorded the highest growth across Asia-Pacific and Japan region in 2004, with a compounded annual growth rate of 67 percent, Gartner said in a statement here today.

"The capability and capacity to invest in penetrating semi-urban and rural markets will be important determinants for increasing market share and creating sustainable business in the Indian cellular market place", it said.

With declining service costs and the introduction of low cost handsets, the barriers to entry for cellular services would come down substantially creating a significant market opportunity, it added.

Mobile data, which accounted for seven percent of service revenue in 2004 is also expected to rise to 20 percent by 2009, according to Gartner.

Operators, however, would have limited success in generating incremental revenue from mobile data services on account of limited wallet share for spending beyond basic voice services and the high cost of data services, which act as a barrier to entry for mass market adoption, Gartner said.

According to Gartner, a large proportion of the market opportunity in India would comprise low-income users, resulting in low average revenue per unit (ARPU). Overall penetration and market opportunity would increase but with thinner margins, it added.

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