Gartner - India Telecom to contribute $25.61 billion by 2011

India will continue to be the fastest growing country in the Asia-Pacific region next to China, with cellular services expected to contribute $25.61 billion by 2011, according to study by global research and analysis firm Gartner.

The telecom industry is likely to register 18.4 per cent growth per annum during the 2007-2011 period. The industry recorded a revenue of $8.95 billion from cellular services in 2006.

The entry of Vodafone would further boost growth, lower tariffs and handset costs in the country. Data services would outpace voice revenue growth and contribute 22 per cent by 2011, up from 9.6 per cent in 2006, the study said.

The research firm also projects cellular market penetration to increase 38.6 per cent by 2011 from 12.7 per cent in 2006. The overall penetration would be driven mainly by an increased focus on rural market, huge promotions by the players and handset bundling schemes.

By 2011, around 58 per cent of the rural population and 95 per cent of the urban population would get mobile connections.

According to Gartner's senior research analyst Madhusudan Gupta, "With more marginal users forming the bulk of the addressable market, low service costs and inexpensive handsets will help to unlock inertia and facilitate the adoption of mobile services."

"Call rates have reduced significantly to about 2.6 cents a minute. However, this remains high compared with fixed line rates at 0.9 cents a minute," he said.

Gartner expects prices to drop, which would further help in lowering the entry barrier. This trend, coupled with the emerging market handset initiative by vendors and operators, would boost adoption of mobile services in the country's semi-urban and rural sectors.

The mobile penetration in the rural market is low at 2 per cent, but this represents an immense opportunity for the cellular service providers. Handset manufacturers were therefore concentrating on launching sub-$25 mobile handsets, the study said.

Businesses were expanding into India's smaller towns and cities, where fixed-line connectivity is limited or non-existent, the study added.

The mobile growth in the Indian market is on an upward trajectory, and the robust growth is expected to continue until 2011. The market is forecast to grow at 23 per cent per annum during the five-year forecast period, growing to more than 462 million connections.

The Indian market is driven by prepaid connections, which accounted for over 84 per cent in 2006. It is expected to reach 93 per cent by 2011.

Gartner expects prices to drop and this will help in further lowering the entry barrier. This trend, coupled with the emerging-market handset initiative by vendors and operators, will boost adoption of mobile services in the country's semi-urban and rural sectors.

The mobile penetration in the rural market is low at 2 per cent, but this represents an immense opportunity for the cellular service providers. Handset manufacturers are therefore concentrating on launching sub-$25 mobile handsets, the study said.

Businesses are expanding into India's smaller towns and cities where fixed-line connectivity is limited or non-existent. Enterprises would use mobile services for intra- and inter-company communications, while mobile players might offer services to corporates at charges that might not be related to distances.

The mobile growth in the Indian market is on an upward trajectory, and robust growth will continue until 2011. The market is forecast to grow 23 per cent per annum during the five-year forecast period, growing to more than 462 million connections.

The Indian market is driven by prepaid connections, which accounted for over 84 per cent in 2006, and expected to grow up to 93 per cent of the connection base by 2011