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Growth spurt of 4G in India to be evident this year

Posted: 02 Feb 2016     Print Version  Bookmark and Share

Keywords:Deloitte India  4G  smartphone  voice call  VoLTE 

This year will see a breakthrough for 4G telecom services in the country as about one-third of the mobile phone users in India will adopt 4G by December, according to a report from Deloitte India. The rise is predicted mainly due to the increased roll-outs by telecom companies in 2015 and the growing demand for 4G-enabled handsets, added the market consulting firm.

The report also predicts a surge in the used smartphone market, which is expected to grow 32 per cent annually till 2020, generating ₹26,845.64 crore ($4 billion), despite the value of the average second-hand smartphone falling to ₹5,704.70 ($85), from the current ₹6,107.38 ($91), driven by a more organised second-hand market.

India is presently the third largest smartphone market with estimated annual sales of about 143 million units in the 2014-15.

The country is expected to become the world's second largest smartphone market by 2017, selling around 174 million units, behind China's 505 million in 2017. "At least 10 per cent of premium smartphones (₹33,557 or higher) purchased will have three or more owners before being retired," the report said.

4G surge in India

India is the third largest smartphone market with estimated annual sales of about 143 million units in the 2014 to 2015. Photo: Mint

The increasing 4G uptake is also expected to impact the way people communicate. India will have as many as 50 million users of so-called Voice over LTE (VoLTE) services, using the long term evolution technology standard, by the end of 2016.

"In spectrum deficient markets like India, VoLTE is expected to increase capacity, allowing operators to move voice calls off 2G and 3G networks and onto 4G networks," the report added.

This could increase the number of users moving away from traditional voice call.

Instead users will substitute traditional voice calls with a combination of messaging, voice and video services delivered 'over the top.'

"A decline in voice call traffic could also enable carriers to reduce the quantity of spectrum assigned to voice, and make this available for data," the report said, adding that as many as 26 per cent of mobile phone users in developed markets will not make a single voice call in any given week.

Another hardware segment that is expected to see significant growth is wearable devices, primarily driven by the younger generation in tier 1 and tier 2 cities. This segment is expected to help the country be a major part of the expected about 250 million units global sales by 2018, said the report. Maximum growth however is expected from North America and Europe.

Smart cities will need investments of as much as ₹10.07 lakh crore ($150 billion) over the next few years, Deloitte estimated. Of this, the private sector contribution is expected to be 80 per cent.

"Several challenges remain with respect to the development of smart cities, including those related to project funding, project management, government decision making and policy and regulatory framework," the report said.

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