The Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010.

In April 2008, India overtook the US as the second largest wireless market, and as a pointer to the increasing global influence of Indian telecom companies, seven Indians have featured in the list of the world's 100 most influential telecom leaders, compiled by Global Telecoms Business, an industry magazine.

According to CRISIL Research estimates, eight infrastructure sectors, which include the telecom sector, are expected to draw more than US$ 345.28 billion investment in India by 2012.

With the rural India growth story unfolding, the telecom sector is likely to see tremendous growth in India's rural and semi-urban areas in the years to come. By 2012, India is likely to have 200 million rural telecom connections at a penetration rate of 25 per cent. And according to a report jointly released by Confederation of Indian Industry (CII) and Ernst & Young, by 2012, rural users will account for over 60 per cent of the total telecom subscriber base.

According to the Geneva-based International Telecommunication Union (ITU), factors like India's current mobile telephone penetration rate of about 20 per cent and market liberalisation policies are likely to offer 'great potential' for the growth of telecom companies in India. Forthcoming services such as 3G and WiMax will further augment the growth rate.

According to Business Monitor International, India is currently adding 8-10 million mobile subscribers every month. It is estimated that by mid 2012, around half the country's population will own a mobile phone. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012.

It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10.

Growth in Segments

According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India. Fixed line capex is projected to be US$ 3.2 billion, and mobile capex is likely to touch US$ 9.4 billion.

Further, according to a report by Gartner Inc., India's mobile subscriber base is projected to exceed 737 million connections by 2012 growing at a compound annual growth rate (CAGR) of 21 per cent and India is likely to remain the world's second largest wireless market after China in terms of mobile connections. The overall cellular services revenue in India is projected to grow at a CAGR of 18 per cent from 2008-2012 to exceed US$ 37 billion. Cellular market penetration will rise to 60.7 per cent from 19.8 per cent in 2007.

GSM companies added over 6.3 million new customers in June 2008, (excluding the GSM subscriber base of Reliance Telecom) crossing the 212 million mark, with a growth of 3.07 per cent over May 2008, according to the Cellular Operators' Association of India (COAI).

According to an analyst firm, Springboard Research, India will become the leading market for WiMax in the Asia pacific region and is expected to have 15.8 million WiMax subscribers by 2012, accounting for 46.7 per cent of total subscribers in Asia-Pacific and 35.7 per cent of revenues from the region.

In a new trend, global consumer electronics and mobile phone vendors are going green in India. Major players like Nokia, LG, Samsung and Haier, among others, are planning to introduce products that will be positioned on an environment-friendly platform, starting the trend of environment as a brand strategy in the Indian consumer electronics industry.

Value-Added Services Market

A report by market research firm IMRB stated that the mobile value-added services (MVAS) industry was valued at US$ 1.15 billion in June 2008, and is expected to grow rapidly at 70 per cent to touch US$ 1.96 billion by June 2009, while according to another report by PricewaterhouseCoopers (PWC), the Indian VAS market is all set to grow to US$ 2 billion in 2008.

Currently, MVAS in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74 billion by 2010.