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Home > Business > PTI > Report

India's teledensity to touch 18% by '09

December 28, 2004 18:02 IST
Last Updated: December 28, 2004 18:17 IST

India's telecom services would continue to record a strong growth with teledensity more than doubling to18 per cent in the next five years, while service revenues would double to around Rs one lakh crore in 2008-09, according to research and opinion firm Cris Infac.

However, blended average revenue per user is falling at an annual rate of 22.8 per cent to Rs 469 per month over the last four years, head (research) of Cris Infac, a subsidiary of CRISIL Ltd, Rajnish Kumar Rastogi told reporters in Mumbai on Tuesday.

"From a meagre 2.8 per cent in March 2000, teledensity rose to eight per cent by September 2004, and we expect it to reach 18 per cent by March 2009," he said quoting a Cris Infac report analysing the long-term prospects of India's telecom services sector.

In unit terms, telecom subscriber base is forecast to grow at an annual rate of 27 per cent to touch 21.2 crore (212 million) by March 2009, driven largely by continuing growth in the mobile services space, he added.

On the services revenues, he said that Cris Infac expects telecom services revenues to double to around Rs one-lakh crore by 2008-09 from an estimated Rs 49,400 crore (Rs 494 billion) in 2003-04.

Mobile services would contribute over 85 per cent of this increase with the remainder being contributed by Internet and leased line circuits, he said.

The services, which accounted for 95 per cent of the additions made to telecom subscriber base in 2003-04, would account for 90 per cent of additions to subscriber base in the next five years also, he added.

Consequently, by 2008-09 mobile subscribers are expected to account for nearly 75 per cent of the telecom subscriber base, up from 43 per cent by the end of 2003-04, Rastogi said.

Cris Infac forecasts mobile subscriber base to rise from 3.33 crore (33.3 million) by the end of 2003-04 to around 15.5 crore (155 million) by 2008-09 at 36 per cent per annum and subscriber base of fixed services to increase to 5.6 crore (56 million) from the present 4.26 crore (42.6 million).

"The growth in mobile subscriber base will be driven by supply-side factors like increase in coverage by operators, strengthening of marketing and distribution networks and increasing affordability of mobile services due to rising income levels and declining tariffs," he said.

Rastogi said, "As per our estimates, the mobile subscriber base would be in the range of 14-17 crore (140-170 million) by March 2009 depending upon the extent of coverage over the next five years, as compared to Rs 3,500 crore (Rs 35 billion) in the last five years."

Declining tariffs and addition of new subscribers with relatively low usage has resulted in the blended ARPU (weighted average of pre- and post-paid ARPU) of mobile operators falling at an annual rate of 22.8 per cent to Rs 469 per month over the last four years.

Cris Infac expects the blended ARPU of mobile operators to fall to Rs 296 per month by 2008-09 and mobile tariffs for local and long distance to continue to drop, driven by a decline in regulatory costs and increase in competition.

Gross ARPU of fixed service operators has fallen at an annual rate of 9.5 per cent to Rs 641 per month over the last four years, and "we expect it to fall to Rs 543 per month by 2008-09," he said.

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