Thanks to the proliferation of smartphones and adoption of 3G and 4G services, the number of mobile broadband subscribers in India has been steadily rising.
Even so, at the end of June, India had just 142.5 million mobile broadband and 17.3 million wireline broadband subscribers, according to data released by the Telecom Regulatory Authority of India (TRAI) . Those numbers are far short of the target of 600 million broadband subscribers that India wants to achieve by 2020. To realize that ambition, India will need to find another 457.5 million users -- or about 114.4 million a year between 2017 and 2020.
Is this even feasible? India signed up just 49.5 million mobile broadband subscribers in 2015, although data does indicate that mobile broadband adoption is gathering pace. Moreover, a report from the GSM Association (GSMA) predicts that mobile data traffic will grow at a compound annual rate of 66% over the 2014-2020 period. The same report reckons India will have 690 million smartphones by 2020.
The growing smartphone market is a key part of the equation. According to Counterpoint Research, another market research company, India now ranks as the second-biggest smartphone market in the world, with more than 220 million users. Because that means less than 30% of the population actually owns a smartphone, the future growth potential is immense. And with more than 150 brands active in the market, cut-throat competition is constantly lowering prices and driving take-up.
Service providers are also pumping money into capital expenditure to support this smartphone growth. The recent market entry of a powerful greenfield operator -- in the form of Reliance Jio -- is forcing operators to keep upgrading and expanding their 3G and 4G networks.
Last year, Bharti Airtel Ltd. (Mumbai: BHARTIARTL), India's largest service provider, announced that it would spend as much as 60 billion Indian rupees on modernizing its network over the next three years. Vodafone India and Idea Cellular Ltd. , the country's second- and third-biggest operators respectively, are also investing in network upgrades. This spending and expansion is fueling interest in mobile broadband services.
Lack of spectrum also plays its part in this story. Until recent auctions, operators did not have the airwaves needed to support high-bandwidth services. But with the sales that have taken place, both existing operators and new entrant RJio have the means to cope with rising levels of demand.
RJio's radical pricing moves, which include sharp reductions to the fees charged for mobile broadband services, are also expected to boost adoption.
Getting to 600 million users will be no mean feat, but various developments are aligning to support some kind of boom in the years ahead.
— Gagandeep Kaur, contributing editor, special to Light Reading