India's mobile communications market will exceed $37 billion by the 2012 says Gartner.

The
information technology and advisory company Gartner expects India's
mobile market to exceed $37 billion in 2012 with a compound annual
growth rate (CAGR) at 18%.




Mobile
subscribers are also expected to exceed 737 million connections by
2012 with a CAGR of 21%. It seems likely that this trend is going to
continue and India becoming the second largest wireless market after
China.



“The
growth in the mobile subscriber base is on the back of a rapidly
proliferating rural market, lower handset costs, and low tariff rates
in the Indian market,” said Madhusudan Gupta, senior research
analyst at Gartner. He continues, “Rural telephony will continue to
trigger growth and is expected to grow four fold during the forecast
period. Call rates have further dropped to about 1.5 cents per minute
narrowing the gap with fixed line rates. These factors along with an
increasing competitive landscape will fuel market growth and
encourage the adoption of wireless services in the rural and semi
urban provinces of India.”



The
analysts at Gartner say that this growth might be connected to the
increasing focus on the rural areas in India. Local companies
concentrate on the domestic handset segment with lower handset prices
with less than $25 per unit to capture the market. The market
penetration is expected to increase 60.7% by 2012 from 19.8% from
2007.



Prepaid
connections are most predominant way for most people in India
accounting for 89% of all connections. It is expected that these
connections will grow to more than 92% by 2012. The total service
revenue for prepaid connections is expected to to grow at 18.9% CAGR
until 2012 and the postpaid connections at 15% CAGR with a subscriber
base of at least 683 million and 53 million respectively.