WiMAX, 3G and number portability to drive Indian wireless market in 2009, says iSuppli

Defying the global economic slowdown, India's mobile-phone demand is expected to continue to rise at an accelerated rate in 2009 due to the rollout of 3G and WiMAX networks and the implementation of mobile number portability (MNP), according to iSuppli.

India's mobile-phone demand is expected to rise to 136 million units in 2009, up 23.9% from 110 million in 2008. This compares to 16.8% growth in 2008. Cellular subscribers in the nation will grow to 319.9 million by the end of 2008, up 36.9% from 233.6 million at the conclusion of 2007. iSuppli estimates India's total wireless subscriber base will grow at a compound annual growth rate (CAGR) of 25.1% for the period 2007 to 2012 to reach 715 million by the end of 2012.

"The continued expansion of India's mobile-handset market is partly due to the declining costs of calls, the availability of inexpensive handsets, increasing geographical coverage and operators' rising portfolio of value-added services (VAS)," said Abhimanyu Raina, associate analyst at iSuppli. "In 2009, the rollout of 3G and WiMAX networks and the implementation of MNP are expected to drive the growth of the wireless sector."

3G, WiMAX and MNP drive demand

Indian telecommunications operators presently are focusing on 2G CDMA and TDMA (GSM) technologies to deliver lower-cost mobile services. However, the process of cost reducing 2G-derived handsets seems to have reached its technical limits and iSuppli forecasts 3G and WiMAX will garner subscriber bases of 250 million and 19 million respectively by 2012. This growth can be attributed to spectrum availability, more affordable price points and support from the government. Initially, the market for these technologies is expected to be driven by corporate and enterprise users and by tech-savvy young people.

MNP will be implemented by the end of 2008 in four metropolitan areas: the National Capital Region, Mumbai, Chennai and Kolkata. These rollouts will be followed by a launch in other areas by April 2009. As shown in nations such as Australia, Japan and Hong Kong, the implementation of MNP increases the churn rate, leading to rising competitiveness in the market. iSuppli expects similar results in India.