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Indian telecom market poised to cross $100 billion by 2015: Boston Consulting Group

January 12, 2011
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The Boston Consulting Group (BCG) which released a white paper titled Digital India: The $100 billion prize, states that the current market for digital products and services in India is pegged at about Rs 3 trillion, and will soon break the Rs 4.5 trillion mark.

“The performance of the traditional telecom sector over the past year ­ with over 200 million new mobile subscriptions but only a 2 to 3 per cent revenue growth ­ seems to indicate that the industry has run out of profitable growth,” says Arvind Subramanian, partner & director and leader, technology, media & telecommunications practice, BCG India. “Against this backdrop of weakening economics, the upcoming sizeable investment cycle in 3G and BWA services appears foolhardy.  But that is not the case.  In fact the narrow definition of the traditional telecom market misses adjacent businesses and opportunities where many of the best growth prospects lie.”

The study highlights that despite the explosive growth in mobile subscribers, total operator revenue has begun to show signs of stagnation. Developed markets have experienced the same slowing of revenue growth as markets start to reach maturation. While the Indian market still has room to grow, it is a much more competitive market than that of most developed nations, and it has become increasingly difficult for carriers to maintain effective price realization.

“In the past, access, or the need to get connected, has been the primary need and entry point into the telecom market for most customers,” says Arvind Subramanian. “But, this is set to change as the internet becomes the driver of the next wave of growth.  For most Indians the internet will be like electricity ­ its value will lie in the servicces it helps deliver.  These would include entertainment, education, healthcare and financial services.  In doing so, the internet will help bridge gaps in hard and soft infrastructure in the country.”

 

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