More Indians than Chinese will soon be signing up for mobile telephone services each month, a symbolic milestone in India’s rapid catch-up with its richer and more populous northern neighbour.
Current growth rates suggest India’s monthly net additions to its mobile subscriber base could overtake those of China as early as September, although overall penetration will continue to lag for many years.
China’s two mobile operators – China Mobile and China Unicom – added 5.6m subscribers in May, while the keenly competitive Indian market, contested by five evenly matched players and a number of smaller ones, grew by 4.25m.
“India has not yet surpassed China in terms of monthly net additions, but it should happen this year,” says Kobita Desai, principal telecoms analyst at Gartner, the information technology research consultancy.
“It’s quite likely to happen in September or October. This is something we’re anticipating.”
Excluding fixed wireless customers, the Chinese mobile market had 374m subscribers at the end of 2005 and is expected to grow by 15 per cent to reach 432m by year end.
India’s stood at 76m last year and is forecast to grow by 68 per cent to 128m in 2006.
Telecoms is one of the rare infrastructural areas in which India can hold a candle to China. Most infrastructure services are 50-100 per cent more expensive in India than in China, according to Morgan Stanley research.
Over the next five years to 2010, Gartner expects China’s mobile subscriber base, the largest in the world, to grow at a compounded annual rate of 11 per cent, compared with 31 per cent for India’s, the fastest-growing major market worldwide.
India will continue to play catch-up with China for some time as coverage is patchy. India’s mobile networks are still largely focused on major cities. Coverage extends to 30 per cent of its 1.1bn population, compared with about 95 per cent in China.
“Today the Indian operator with the widest coverage, BSNL, has done around 7,000 towns and cities,” says Ms Desai. “As there are around 650,000 villages in India, there’s a long way to go.”
India’s mobile penetration rate stood at just 7 per cent in March, but should hit 32 per cent by 2010, according to Gartner, while China’s is set to rise to 48 per cent from 28 per cent.
The astonishing acceleration in the growth of the Indian mobile market reflects a 93 per cent fall in the cost of calls since 1998 and growing availability of affordable handsets. More than 90 per cent of Indian mobile users have signed up since January 2003.
On June 9, India announced it had become the fifth member of what its telecoms regulator called the “100m mobiles club”, joining Russia (130m in February), Japan (141m in January), the US (170m in January) and China.
Get alerts on China Mobile Hong Kong Ltd when a new story is published