Mobile industry accounts for 6.1pc of India’s GDP: GSMA

BANGALORE, INDIA: India is on track to surpass half a billion mobile subscribers by the end of the year, according to a new GSMA study. The report finds that 13 per cent of the world’s mobile subscribers reside in India and that subscriber growth is forecast to outperform the regional and global averages over the coming years.

“India is a unique mobile market and one where the mobile ecosystem is playing a hugely influential role in transforming the lives of its citizens, and driving economic growth,” said Alex Sinclair, Acting Director General and Chief Technology Officer at the GSMA. “The market is now rapidly migrating to mobile broadband technology, which is providing a platform for India to transform into a digitally empowered society and connect many millions of unconnected citizens to the internet over the coming years.”

Here are some highlights from the report:

Mobile subscribers: India had 453 million unique mobile subscribers at the end of 2014 and it is forecast to reach 734 million by 2020, accounting for almost half of all the subscriber growth expected in the Asia Pacific region over this period. The mobile subscriber penetration rate stood at 36 per cent of the population at the end of 2014, compared to a 50 per cent global average. The subscriber penetration rate in India is forecast to reach 54 per cent by 2020 as many millions more are connected by mobile.

Mobile broadband: Mobile broadband networks (3G/4G) accounted for only 11 per cent of Indian mobile connections in 2014, but are expected to make up 42 per cent of the total by 2020. One factor driving the migration to mobile broadband networks is the increasing adoption of smartphones, which has been fueled by a raft of low-cost smartphones from both international vendors and, increasingly, via a homegrown smartphone manufacturing ecosystem. More than half a billion new smartphones connections are expected in India between 2015 and 2020, bringing the total to 690 million, up from 149 million in 2014.

Contribution to GDP: India’s mobile industry made a total contribution of Rs. 7.7 lakh crore (US$116 billion) to the Indian economy in 2014, equivalent to 6.1 per cent of India’s total GDP. This contribution is forecast to almost double to Rs. 14 lakh crore by 2020, which would represent 8.2 per cent of projected GDP by that point.

Job creation: The industry directly and indirectly supported 4 million in jobs in the Indian economy in 2014, a figure predicted to rise to 5 million by 2020. It also makes a highly significant contribution to the funding of the Indian public sector, contributing approximately Rs. 1.1 lakh crore (US$16 billion) in 2014 in the form of taxation and spectrum auction payments.

Key to Delivering a Digital India: India’s mobile industry is playing a key enabling role in the Digital India initiative. Due to the relative lack of fixed-line infrastructure in the country, mobile is already the dominant platform for internet access. The  number of individuals accessing the internet over mobile devices has grown from less than 100 million subscribers in 2010 to nearly 300 million at the end of 2014.

However, network coverage and digital literacy remain key barriers to further extending mobile internet access, as many of India’s unconnected communities reside in rural or remote areas. The report outlines a number of strategies that will help close this ‘digital divide’ and support the cost-effective deployment of mobile broadband across the country. These include an increase in the availability of harmonised spectrum at a reasonable price, as well as a reduction in mobile-specific taxation that will serve to make mobile broadband more affordable for consumers and maximise the ability of mobile operators to invest in their networks. The report also highlights the need to adapt regulatory frameworks to reflect the new market dynamics that have brought changes to traditional mobile communication services.