India's Mobile Boom Unabated, as 3G Rolls out

Large numbers of Indians are acquiring new mobile connections, which rose to 23 million in November, up from 19 million in the previous month.

About 20 percent of these 2G subscribers may migrate to 3G services that are being rolled out by key operators including dominant Bharti Airtel, said Kunal Bajaj, director for India at telecom consultancy Analysys Mason.

There were 729.6 million mobile connections at the end of November, according to data released by the Telecom Regulatory Authority of India (TRAI) on Tuesday.

That number includes people who have more than one mobile connection, as well as connections that have been allowed to lapse by some users, according to analysts.

Bharti Airtel and the third-largest operator, Vodafone Essar, the Indian joint venture of Vodafone Group, each added about 3.1 million subscribers. Reliance Communications, the second-largest operator, added 3 million subscribers, while state-owned Bharat Sanchar Nigam added 2.99 million subscribers, according to TRAI.

Most of the subscribers will move to 3G to take advantage of faster Internet access speed, and then later look at other applications like video, Bajaj said. The expected availability of 3G-enabled handsets for under US$100 will accelerate this trend, he added.

Mobile operators will also look at 3G as a way to increase average revenue per user (ARPU), Bajaj said. ARPU has been falling in 2G services because of stiff competition, which has pushed down tariffs.

To counter competition in urban markets, some operators started expanding in rural markets. But according to TRAI data, in the quarter ended Sept. 30, 67 percent of subscriber additions were in urban markets. The rate of growth of rural subscriptions also declined in the quarter, in comparison to the previous quarter, TRAI said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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