13 Jun 2012

India 3G subscriber base poised for growth

With overall stagnant 2011 broadband penetration at 13.35 million primarily DSL subscribers, the Indian market represents a significant growth opportunity for the broadband wireless sector, reports Maravedis-Rethink in its recent report "India 4G and Cellular Market Analysis and Forecasts, 2012-2017".

According to the analyst business, 3G is starting to make inroads in India and the active 3G subscriber base will reach 41 million by the end of 2012.

"In India, the growth of 3G has been slower than many expected, mainly because of the high price of services," said Basharat Ashai, report author. "However, we believe that the availability of lower cost smartphones in the US$50 range will drive 3G growth in India in the coming years."

"As long as TD-LTE is the de facto technology for mobile broadband in India, the challenge operators face lie in bringing an inexpensive multi-mode (2G/3G/TD-LTE) device to consumers," added Caroline Gabriel, research director for Maravedis-Rethink. "Multi-mode devices give operators an opportunity to expand 4G with the option of fallback to 3G networks in rural and suburban areas. Operators are pressuring chipset/device manufacturers to accelerate their efforts to get the cost of multimode devices down substantially."

Research also indicates the TD-LTE subscriber base in India will reach 67 million by the end of 2017 and 3G smartphones will dominate the device category with 55% market share by the end of 2017. The availability of content in local languages will be a key determining factor for takeup of 3G and TD-LTE service, especially in rural areas, and given their small amount of spectrum (5MHz), 3G spectrum holders will have to offload data traffic in the future.

Analysts also believe that Indian operators providing broadband wireless services in the unlicensed frequency bands (2.4 GHz and 5.8 GHz) are expected to play an increasingly important role in the 3G data offload. By the end of 2017, Bharti Airtel is expected to have the most 3G subscribers and a FDD-LTE variant will be deployed when 700 MHz spectrum is allocated in late 2014 or early 2015.

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