Wifi Revolution

He revolutionized the Indian telecom sector in the eighties. Now, Sam Pitroda wants the Indian companies to take advantage of the booming mobile market in India.

Speaking in a press meet on the eve of CII partnership summit Bangalore, India, Pitroda said India is the fastest growing mobile handset market in the world - and Indian companies should grab the initiative to capture this market.

In the next five years, the demand for mobile handsets is expected to reach the 500 million mark. The mobile revolution is yet to reach many rural parts in India - and considering the huge population, there is lot of untapped market for mobile companies. So, telecom manufacturing would be a win-win situation for both mobile companies and the customers.

Researches at the global level also confirm Pitroda’s belief. According to Merrill Lynch, with a combined handset volume growth of 21 percent CAGR from 2005 to 2010, the world market growth will be led by India and China in the coming years. With the mobile phone market reaching its saturation point in most of the current major markets in the world, mobile companies are in a need to look for new avenues to market their products.

In 2005, mobile penetration in India was just 7%. It is expected to reach 35% by 2010 as the market grows. Most of the mobile users in India are youngsters and professionals in urban areas. Mobile phones have not penetrated the rural areas as the coverage and availability of handsets are scarce in these areas. In most parts of India, mobile phones are still status symbols rather than a necessity.

The Mobile Phone Market in India

With more and more companies set to enter the Indian mobile phone market, it is set to offer customer friendly offers in the coming years. Already, mobile phone charges in India are among the lowest in the world and many cellular operators offer free, unlimited outgoing calls to the local numbers in their own network for a monthly charge.

The Indian cellular market is dominated by companies such as Airtel, Hutch, Tata Indicomm, Spice and Reliance. Few years ago, when the state owned BSNL entered the market with its low call rates and amazing coverage in the rural areas, mobile market witnessed a boom in these areas. Within 18 months of their launch, the state owned companies, i.e., BSNL and MTNL signed up more than six million subscribers among them!

As the mobile call rates drop and as the handset companies lure the customers with a variety of handsets, the market is slowly picking up. The Indian government contributes to the mobile boom by having company friendly policies. Cellular operators have been offering various schemes such “Free incoming calls for life” with the approval of the telecom ministry.

With varied income and tastes, India is an ideal market for both low end and high end mobile handsets. Basic mobile phones are available for as little as $40 along with the high end models that hit the Indian market on a regular basis.

Will the local mobile handset manufacturers take up the invitation by Sam Pitroda? Let’s wait and watch!

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Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.

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