India nearly doubles mobile phone use in 2006

India added close to 74 million new mobile telephone subscribers last year, making it one of the most attractive markets for mobile telephone operators and wireless equipment vendors.

The number of wireless subscribers grew 97 percent from 75.94 million at the end of December 2005 to 149.5 million subscribers at the end of December last year, according to the Telecom Regulatory Authority of India (TRAI) in Delhi.

The growth in the mobile telephony market has come after deep cuts in tariffs by mobile services operators, which cut into the average revenue per user (ARPU). Mobile service operators are now focusing on new services such as e-mail and music downloads to boost ARPU.

The country added 6.48 million mobile subscribers in December, while in November it added 6.80 million subscribers, TRAI said Monday.

Even as the mobile telephony market in India is booming, the number of fixed-line telephone subscribers dropped, suggesting that first-time users of telephones are opting for mobile phones. The number of fixed-line subscribers was down to 40.43 million in December as compared to 48.84 million a year ago, according to TRAI.

The Indian government is targeting 500 million telephones, both fixed and wireless, by 2010. Based on current trends, most of the demand for new connections is likely to come for mobile services.

The large growth in mobile subscribers in India has attracted foreign companies to invest in providing mobile services in the country. A recent relaxation of government rules allows foreign companies to hold up to 74 percent stake in a mobile services operators.

British mobile services operators Vodafone Group plc is for example bidding for the majority share of Hutchison Telecommunications International Ltd. in Indian operator Hutchison Essar Ltd. But it may not be easy going for Vodafone, as there are a number of Indian and foreign bidders for Hutchison

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