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The Diffusion of Mobile Phones in India
The Diffusion of Mobile Phones in India
-
Dr. Sanjay K. Singh
Department of Humanities and Social Sciences
Indian Institute of Technology Kanpur
INDIA
Growth in telephone subscriber base in India
100
0
Time
15
22
29
36
43
50
1
8
The saturation level of mobile-density for a country is likely to depend
on whether it is an early adopter or a late adopter of telephones. Early
adopters (developed countries) are expected to have lesser reliance on
mobile phones (due to high switching cost) whereas late adopters
(developing countries) are expected to have lesser reliance on main
line telephones (due to high infrastructure cost).
Teledensity and Percentage Share of Mobile in Selected Developed Countries
Analysis reveals that the saturation level of mobile share in developed
countries could be anywhere between 50% and 70% whereas the same
would be between 80% and 90% for the developing countries.
Assuming that the saturation level of teledensity could be anywhere
between 120 and 150 telephones per 100 inhabitants, the saturation
level of mobile-density in developing countries is likely to be between
100 and 120 mobile phones per 100 inhabitants.
Teledensity and Percentage Share of Mobile in Selected Developing Countries
Model estimation
Since India is a late adopter of telephones, its saturation
level of mobile-density is likely to be between 100 and 120
mobile phones per 100 inhabitants.
However, both logistic and Gompertz models are estimated
for six different saturation levels (70, 80, 90, 100, 110 and
120 mobile phones per 100 inhabitants) along with without
imposing any restriction on the same. The mean absolute
percentage error (MAPE) for the last three observations is
used to find out the most appropriate model and the
saturation level.
Annual data of mobile-density from 1995-96 to 2005-06 is
used for the estimation of the models.
Data on mobile subscriber base and mobile-density is taken
from Telecom Regulatory Authority of India (TRAI)
publications (www.trai.gov.in) and telecom sector database
from www.infraline.com.
Estimation results (with t-statistic in parentheses ): According to both R2 and
MAPE, the Gompertz models fit the data better than the logistic ones. As
expected, final estimate of the saturation level in the no restriction model does
not seem to be globally optimal. It seems that the Gompertz model with the
saturation level of 120 mobile phones per 100 inhabitants is the best model to
depict the diffusion of mobile phones in India.
Model Estimate
70
71.0
No. of mobile phones per 100 inhabitants
60 64.7
57.9
50
50.9
40 43.7
36.5
30
20
10
0.4 8.1
0
2000-01 2005-06 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Future Mobile Subscriber Base in India
It is projected that almost 350 million new mobile subscribers will
be added between 2005-06 and 2010-11 and more than 450 million
will be added between 2010-11 and 2015-16.
1000
899
900
808
No. of mobile subscribers (in million)
800
715
700
620
600 526
500 433
400
300
200
90
100
4
0
2000-01 2005-06 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Note: Future population of India is taken from the United Nations Population
Division publication.
Estimates of revenues collected by mobile operators
and the government
•Mobile operators’ revenue depends on ARPU and no. of subscribers
•Assuming that the ARPU will stabilize at around Rs. 300 per month
by the year 2010-11, mobile operators’ revenues during the year
2010-11 and 2015-16 have been estimated
Average Revenue per Mobile User per Month in India
Estimates of Mobile Operators’ Revenue
No. of Mobile Revenues GDP Mobile
mobile ARPU per from (Rs. in billion at revenue as a
subscribers year mobile factor cost at percentage of
(in million) (Rs.) services current prices) GDP
(Rs. in
billion)
2005-06 90 4500 405 32000 1.3
2010-11 433 3600 1559 57600 2.7
2015-16 899 3600 3236 103680 3.1
The analysis shows that the high growth phase of the diffusion
of mobile phones will continue till 2012-13.