India - telecommunications growth

Telecom services revenue to touch $54 b by 2012: E&Y report

India’s telecom services industry revenues is projected to reach $54 billion in 2012, as compared with $31 billion in 2008 according to the CII Ernst & Young report titled ‘India 2012: Telecom growth continues.’

Mr Prashant Singhal, Telecom Industry Leader, Ernst & Young India, said, “The telecom sector has witnessed exponential growth in the past decade. However, the global economic scenario is expected to have a low to medium impact on the overall telecom industry. Despite this scenario, the interest shown by global telecom operators in the domestic market has been very encouraging.”

He further added, “Going forward, rural telephony, 3G, WiMax and data services will drive sector growth in 2012. The industry will witness sustained growth in mobile services and data revenues. Network expansion will continue in order to support the rural growth. It is imperative for the government to revisit high levies on the telecom sector and lay down a clear roadmap for future spectrum allocation. A positive and pro-active approach from all stakeholders in defining the future course of the sector will ensure a positive outlook for 2012.”

SUBSCRIBER BASE TO GROW

Findings from the report indicate that the total telecom subscriber base is expected to reach approximately 690-700 million by 2012 to include about 640-650 million wireless users and approximately 45-50 million fixed line users.

This is going to be primarily driven by a rise in communications demand from semi urban and rural India.

Circle B and Circle C would experience the highest growth and would contribute to about 60 per cent of the total mobile subscribers.

“That said the availability of adequate spectrum could remain a hurdle for wireless growth. The telecom sector will witness another round of Mergers & Acquisitions (M&A). As new operators roll-out networks, there could be 10-12 operators in each circle. However, by end of 2012, industry consolidation will result in about five to seven large operators,” it said.

3G & WiMax

The report emphasises that the launch of 3G and WiMax services will drive the data revolution. In 2012, 3G services will have just begun to spread in India and mobile entertainment and mobile banking are likely to be the biggest drivers for data services. 3G and WiMax services are expected to gain popularity initially in the top 20 cities and gradually penetrate to the rest of the country. By 2012, India would have about 25-30 million 3G subscribers and 3G revenues would reach around $4-5 billion by 2012. WiMax, on the other hand, could attract about 8-10 million subscribers and could account for about $1-1.5 billion by 2012.