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India Telecommunications Report Q4 2013 - New Report Available

Fast Market Research recommends "India Telecommunications Report Q4 2013" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 10/24/2013 -- The Indian telecommunications market has experienced a considerable number of challenges in the last few years due to constant regulatory disputes and a hostile business environment, which includes an aggressive price war that has eroded operators' profitability. Despite the country's significant growth potential, the industry is struggling to capitalise on the opportunities, which will remain the central theme in the near future as we do not expect the market to reach a swift resolution of these complicated issues.

Key Data

- By March 2013 the Indian mobile subscriber base was back on a gradual upward trend. By end-2013, we envisage 891mn subscribers.
- We continue to expect ARPU levels to trend higher due to 3G and value-added services, although we highlight the fact that the industry is prone to downside risks such as aggressive price competition, with a number of key operators having recently slashed their 2G data charges (see below).
- Looking longer term, proposed legislation to allow foreign operators to have up to 100% stake in local telecom companies would inject much-needed funds to rollout the nation's 3G network infrastructure.
- We forecast slow but steady fixed broadband subscriber growth as operators and consumers opt for cheaper and more convenient mobile solutions.

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Risk/Reward Ratings

India is in 13th position in BMI's Asia Pacific Telecoms Risk/Reward Ratings, with a Telecoms Rating score of 46.5 in Q413.

Key Trends And Developments

In June 2013, Vodafone India announced an initiative to cut its 2G data charges by 80% as part of a broader strategy to accelerate mobile internet adoption, consumption and value addition. The company clearly hopes the move will lead to further rapid growth in revenue from browsing-related data services - its fastest area of growth in FY2013 - and this additional revenue could be used to finance its heavy investments in infrastructure and spectrum.

Later the same month, Bharti Airtel and IDEA Cellular followed Vodafone India's lead by drastically reducing 2G mobile data rates in a bid to encourage more consumers to use premium non-voice services.

Both companies claim that greater affordability, combined with the growing ubiquity of wireless dataenabled devices such as smartphones and tablets, will usher in a new wave of mobile data growth.

Mukesh Ambani has announced that he aims to spend INR130bn (US$2.28bn) on rolling out a 4G LTE network as part of ambitious plans for his Reliance Jio Infocomm telecoms operations that include tripling the headcount at the company and the recent signing of a deal with Reliance Communications.

In July 2013, India's Telecom Commission backed a new proposal to allow foreign operators to have up to 100% stake in local telecom companies. At present, foreign direct investment (FDI) in the sector is limited to 74% of an Indian operator.

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