Indian Mobile markets: Looking ahead at Growth & Consumption
According to a study by FICCI and E&Y, demand of mobile phones in India is expected to reach 350 million units per annum by 2020. The same source estimates the current size of the domestic Mobile market is close to 130 million p.a. My estimate from a few other sources roughly put the current size of the Indian mobile phone market at 170 million p.a. Given the variance in numbers by about 30%, the CAGR calculated for the 350 million p.a number is around 7-10% (Depending upon whether you choose 130 million or 170 million as the base).
E&Y FICCI estimate 505 million handsets are estimated to be manufactured in India, during the same year (2020), which would thus establish India as a global exporter of entry level and feature phones. Towards this, the study establishes a need to set up handset manufacturing cluster parks that would enable a sustainable ecosystem for the manufacture of mobile handsets in the country. The study has found that average selling price (ASP) of handsets in the country is estimated to increase to Rs 2,950 by 2020 as compared to Rs 2,300 in 2010. Thats a healthy 40% increase in ASP of the phones.
Affordability of feature-rich handsets and consumption in rural markets is expected to be a key enabler of handset adoption.A favourable policy and regulatory initiative conducive for handset manufacturing in India is expected to drive sustainable growth in this segment.
The number of 3G subscribers expected to cross 300 million by 2020, fuelling the growth of 3G-enabled handsets.