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Indian mobile market defies gravity

Posted: 11 Mar 2009     Print Version  Bookmark and Share

Keywords:mobile telephone operators  Indian mobile market  Low call rates 

The Indian mobile phone market is defying gravity with a booming business despite the economic gloom, reports Agence France-Presse. Low call rates, driven by fierce competition among mobile-telephone operators, are fueling the mobile market growth, experts say.

"India represents a unique [mobile] market where competition is the highest and the tariffs are the lowest," said T.V. Ramachandran, head of the Cellular Operators Association of India.

Having outstripped China last year, India is now the world's fastest-growing mobile market with an added record of 1.54 crore wireless users last January. Most of the growth has been driven by lowly paid people in cities and increasingly in rural areas as innovative marketing has made telephone calls cheap enough for some of the poorest pockets. Customers can pay less than 0.99 paise (2 US cents) for a call and Rs.646.35 (US$13) for a new handset.

"One of the biggest factors in this growth has been affordability both in terms of handset and tariff plans," said Girish Trivedi, a senior analyst at consultancy Frost & Sullivan.

While many are affected by diving stocks and property prices, market players say the case is different for poor Indians since they do not own shares or property.

"The people in rural India are not being affected by the global crunch," said Sanjay Gupta, a chief marketing officer at Bharti Airtel.

India's mobile-telephone "revolution" is still mainly evident in the cities, but telephone firms are strongly aiming the vast rural market, where almost 70 per cent of the population lives.

According to the Telecom Regulatory Authority of India, by the end of January, 34.5 per cent of the population owned a handset. But while 66 per cent of people in cities own a telephone, only about 9 per cent own one in rural areas.

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