India 3G Connections to Grow 3x to 400 Million by 2015, WCDMA to Account for 80% Connections

The number of third generation (3G) subscribers in India will reach 400 million by 2015 as the telecom operators ramp-up rollout of the high-end mobile telephony service, said a Wireless Intelligence study.

“India’s 3G connections are set to grow three-fold between 2011 and 2015 as operators ramp-up rollout of new 3G networks,” said the study titled “India 3G rollout”.

According to the report, the telecom operators are likely to invest $2.5 billion in building the new networks and rolling out 3G services in 2011.

“Indian operators spent a combined $15 billion in acquiring Wideband Code Division Multiple Access (WCDMA) 3G spectrum at auction last year and are forecast to jointly invest a further $2.5 billion in building the new networks and rolling out 3G services in 2011,” it added.

The study notes that over 80 percent of 3G connections will be based on WCDMA in five years, with the remaining 20 percent on CDMA-based 3G networks.

However, 2011 has already seen a succession of rival launches, including Bharti (in January), Aircel (February) and Vodafone (March) and it forecasts that all new WCDMA-based operators will have launched services by June 2011.

Telecom giant Bharti Airtel is expected to command the largest 3G share with 18 percent followed by Reliance Communications and Bharat Sanchar Nigam Ltd with 15 percent and 13 percent respectively.

“Competition in the Indian 3G space is likely to be intense as most operators have set ambitious targets,” said Joss Gillet, senior analyst at Wireless Intelligence.

“Market share growth clearly depends on how fast operators can deploy 3G networks in their respective licensed areas, and how rapidly they can address demand in rural areas,” he added.

Even though initial 3G rollouts are concentrated in the metro areas including cities like Mumbai, Delhi, Chennai, Kolkata they will soon be outstripped by fast-growing demand for 3G in more populous regions such as Punjab, Bihar, Andhra Pradesh and Haryana.

But the situation is complicated as no 3G operator is able to offer a nationwide service, which will require network sharing and roaming between operators. Pricing 3G services appropriately in a market where around 200 million prospective users live on less than $2 a day is also a major challenge.

“Indian operators are betting on 3G services to stabilise ARPU (average revenue per user) and increase non-voice revenues to around the 30 percent mark in the coming years,” added Gillet.

“Even though we do not anticipate a price war in the 3G space, profitability will take time due to the high investments required and the current need for additional spectrum.”

Source: Times of India

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