India Country Market
Insights and Opportunities
Telecommunications Equipment Sector
Overview: India's 429 million-line telephone network (fixed plus cellular) is among the top 5 networks in the world and the second largest among the emerging economies, after China. India has one of the fastest growing telecommunications systems in the world, with system size (total connections) growing at an average of more than 20 percent per annum over the last 4 years. According to the Government of India (GOI), the demand for new telephone lines during the next 3 years is estimated to be over 100 million. The industry is considered as having the highest potential for investment in India. The growth in demand for telecom services in India will be highest in the Cellular Services Sector, followed by national long distance, international long distance and Basic Telecom Sector.
India has a relatively low tele-density of 31 per 100 persons. Tele-density in India rural areas is 8.8 per 100 people and the government plans to increase this to 10 per 100 by 2010. A total of 554,454 out of 607,491 villages have been provided with village public telephone (VPT). Considering India's population of 1 billion, it is estimated that to achieve these objectives, approximately 125 million telephone connections by the year 2011 need to be established. At current prices, this translates to an additional investment of approximately $48 billion by 2011.
Opportunities: The total subscriber base of cellular subscribers is currently at 391.76 million, up by 96.86 percent from the previous year. The subscriber base is estimated to reach 500 million by 2011 (Source: Cellular Operators Association of India), thus resulting in huge opportunities for U.S. telecom equipment vendors.
Value-added service providers are growing by the day, and are demanding good infrastructure. E-mail, Internet services, frame relay services, video conferencing, electronic data interchange and voice mail have been accorded value-added services status. These value-added services interface with basic telecom services and increased telecom traffic several fold. With the increased investment in the value-added services, the demand for other switching products such as cellular switches, ISDN switches, gateway switches, ATM switches, is bound to grow sharply.
Broadband Wireless Access/WIMAX growth is expected to from current level of 0.25 million to 11 million in 2013 (144 % PA). 3G Modem subscribers is expected to grow from the current level of 2 million to 22 million by 2013 (82% PA). EV-DO and WCDMA subscribers are expected to grow from the current level of 3 million to 67 million by 2013 (88% PA). The estimated equipment opportunity is about US$ 3 billion and annual service revenue opportunity is about $5 billion.