The Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010.

India added 113.26 million new customers in 2008, the largest globally. The country's cellular base witnessed close to 50 per cent growth in 2008, with an average 9.5 million customers added every month.

According to the Telecom Regulatory Authority of India (TRAI), the month of October 2009 saw telecom operators in India register a record number of 16.67 million new mobile subscribers. The number, which combines GSM, CDMA and FWP subscribers, brings the total number of wireless subscribers to 488.4 million as of October 2009.

In all, the country's total telephone subscriber base has increased 3.26 per cent, from 509.03 million in September 2009 to 525.65 million at the end of October 2009, according to TRAI, which added that the overall tele-density (telephones per 100 people) has touched 44.87.

According to Business Monitor International, India is currently adding 8-10 million mobile subscribers every month. It is estimated that by mid 2012, around half the country's population will own a mobile phone. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012.

It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10.

Moreover, according to a study conducted by Nokia, the communications sector is expected to emerge as the single largest component of the country's GDP with 15.4 per cent by 2014.

The Indian equipment market is estimated at US$ 24 billion in FY09. Finnish giant Nokia is the market leader, with over US$ 3.4 billion revenues last fiscal, followed by Ericsson at US$ 2.11 billion.

With the availability of the 3G spectrum, about 275 million Indian subscribers will use 3G-enabled services, and the number of 3G-enabled handsets will reach close to 395 million by 2013-end, estimates the latest report by Evalueserve.

According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India.

Value-Added Services Market

Currently, mobile value-added services (MVAS) in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74 billion by 2010.

Major Investments

The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services.

• Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion.
• The government has approved the foreign direct investment proposal of the Federal Agency for State Property Management of the Russian Federation to buy 20 per cent stake in telecom service provider Sistema-Shyam for US$ 660.1 million.
• Tata Teleservices is planning to invest an additional US$ 1 billion in its recently-launched GSM service Tata DoCoMo. It had already committed an investment of US$ 2 billion for the GSM services when it was launched in June this year.
• Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will build 56,596 telecom towers by financial year 2010, increasing the total number of towers to 100,000.
• BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project.
• Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile subscriber base from 40 million at present to over 100 million.
• Bharti Airtel will invest US$ 126.5 million to ramp up its networks in the Assam and Northeast circles in 2009-10.
• Loop Mobile, formerly known as BPL Mobile plans to invest around US$ 75 million in its Mumbai operations.