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M&A likely in Indian telco industry in 2009 - Gartner

03 июля 2008

Global players seek entry to India, analyst firm reports; predicts mobile subs will exceed 737m by 2012.

The Indian telecommunications industry is set for some merger & acquisition activities in 2009, with two new players set to join the 14 existing operators, a report by IT research and advisory firm Gartner Inc., said Wednesday.

This report comes a few days after mobile phone operator Idea Cellular Ltd. said it will buy a 40.8% stake in smaller rival Spice Communications Ltd. and then merge Spice with itself.

The Gartner report follows heightened interest in
India's telecommunications market - the fastest growing in the world, adding about 8 million subscribers a month.

According to recent media reports, global companies including AT&T Inc., Emirates Telecommunications Corp., or Etisalat, and Orascom Telecom Holding are scouting for deals with Indian players in a bid to enter the market, which Gartner expects will continue its strong growth in the next four years.

Annual revenue from mobile phone services in
India is likely to increase to more than $37 billion by 2012, growing at 18% a year from 2008 to 2012, Gartner said in the report.

's mobile subscriber base will exceed 737 million by 2012, growing at 21% a year from 2008, Gartner said. The country currently has about 277 million cellphone users.

The bulk of revenue - about 85%- will continue to come from voice operations in 2012, though the percentage of revenue from voice will reduce from 89% in 2007 because of the faster growth in data services, Gartner said.

"The growth in 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.

"Rural telephony will continue to trigger growth and is expected to grow fourfold during the forecast period," Gupta added.

Gartner expects mobile market penetration to rise to 60.7% in 2012 from 19.8% in 2007, helped by growth in the rural market, by more players entering the local mobile handset market and lower handset prices.

Prepaid mobile connections will continue to dominate the total mobile user base - rising to 92%, or 683 million connections, from 89% in 2007, the research firm said.

"Given the high level of competition and anticipated consolidation, different business models will emerge that could push tariffs further down, with Indian mobile service consumers set to emerge as the biggest beneficiaries," Gartner said.

The Indian telecommunications industry will move into the next phase of evolution with the launch of WiMAX services in the first quarter of 2009, and third-generation services by the end of the second quarter, the report said.

"With the introduction of mobile number portability in 2008, churn rates are not expected to rise significantly, as
India continues to be a prepaid dominated market," Gartner said.

Источник: Total Telecom

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