Sectoral Analysis (Telecom Industry)12 March 20093
Executive summary:
India’s economic growth has slipped to around 9% in 2007
-08, from 9.6% in 2006-07.The dip in growth has further deepened the fears of a possible global recession andrising inflation, and its overall impact on the Indian economy. According to the officialfigures, industrial output growth has slipped to 8.6% in 2007-08, as compared with11.6% in 2006-07. The agriculture and allied sector has grown a tad faster at 4.5% during2007-08. The services sector is marginally upped, registering a growth of 10.7% in 2007-08, as compared to 10.6% in 2006-
07. India’s economic growth is expected to grow at
7.2% in 2008-09.Service sector is one of the most significant sectors of the Indian economy, contributingnearly 55% to the GDP in 2007
–
08. The total number of telephone lines was over 410 mmark at the end of Feb 2009 second only to China (in Jan 09 new mobile phonesubscribers to reach 463.9 million subscribers)
.India’s
number of cellular (GSM,CDMA and WLL-Fixed) subscribers: 362 m (as on 31.1.09 and 39.42m werefixed/landline subscribers. Number of broadband subscribers: 5.65 m (as on31.1.09) Number of GSM cellular subscribers: 277.2 m (as on 28.2.09) Numberof CDMA cellular subscribers: 80.6 m (as on 30.11.08) Overall teledensity: ca345/1000 inhabitants (as on 31.1.09). The Indian mobile market which is thrivingeven under these harsh economic conditions adds an approximate 10 million
subscribers per month, as against China’s addition of 8 million subscribers monthly. The
latest report by the Telecom Regulatory Authority of India states that India has ateledensity of 34.5% as of January 2009, up from 33.2% in December last year.According to research, estimates the Indian mobile market will expand to 637 millionsubscribers by 2012.In terms of projected revenues, such a huge subscriber base isexpected to generate more than $37 billion by 2012 growing at a CAGR (compoundedannual growth rate) of 18%. This growth potential offers enough incentive to overseastelecom companies to vie for their share of the pie. Investor-friendly regulations by thegovernment, allowing up to 74% holding in a domestic entity by a foreign company, isan icing on the cake.The global economic recession and slowdown seems to have no effect on the mobileusage in India as the country adds 9.18 million GSM (The Global System for Mobile)
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