India’s wireless telecom sector – Huge untapped potential

Market Overview:
India’s wireless telecom sector experienced robust 43% yearly growth to touch total subscriber base of 752.19 million in 2010 compared with 525.15 million in 2009.
The subscriber growth rate of 43.2% in 2010 is lower compared with 51.4% in 2009. 
Although, overall wireless tele-density is 63.22% in the country. There still exist huge gap between rural (30.11%) and urban (140.53%) penetration. 
Out of estimated Indian population of 1,189.8 million at the end of 2010; only 48.9% people are having access to mobile phone. Hence, more than half of the country’s population is yet to benefit from wireless telephony revolution.

Moreover, considering the fact that only 70.36% of the total wireless subscriber base is “Active”; the untapped market potential is huge for the wireless telephony.

In terms of mobile circles, Circle C (49.06%) and B (46.78%) are showing higher growth rates compared with more elite regions such as Circle A and Metros.

Competitive Scenario:

Indian wireless telephony market is highly competitive with presence of 15 mobile operators. However, almost 95% of the market is covered by 7 leading players.

In terms of subscriber base, Bharti leads overall market with 20.27% share closely followed by Reliance (16.70%) and Vodafone (16.52%).

However, in terms of active users on the network Bharti has huge advantage with 26.29% market share compared with 17.72% of Vodafone and 15.81% of Reliance. This clearly indicates the inherent strength in the business model of Bharti Airtel. Moreover, Bharti features among top 2 players in 14 out of 22 circles in the country indicating its strong presence across all regions.

Idea also fares reasonably well on the parameter of active subscriber base with 90.04% of its reported subscriber base remains active. While Tata is the worst performer among leading pack with less than 50% of its total subscriber base can be considered as active.

State-wise Analysis:

Indian wireless telephony market is experiencing steady shift towards Eastern region as top 5 markets in terms of highest growth in 2010 are West Bengal (62.2%), Orissa (60.0%), Bihar (55.5%), U.P. – East(51.8%) and U.P. - West (51.4%). All these figures are significantly higher compared with 43.2% of overall wireless subscriber growth in India.

In terms of subscriber base, Tamil Nadu is the largest market followed by U.P. East, Andhra Pradesh, Maharashtra and Bihar. Incidentally, same states occupy top 5 positions on active subscriber parameter.
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