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In-Stat sees India as Asia's fastest growing entity

Posted: 16 Sep 2005 ?? ?Print Version ?Bookmark and Share

Keywords:wireless? gsm? cdma? mobile market? in-stat?

Rising to become the second largest mobile market in the world, India is swiftly becoming the focal point for global mobile handset manufacturers. Based from In-Stat's recent report, titled "Asia Wireless Annual Report: Subscribers, Handsets, and Infrastructure", India is forecasted to be the fastest growing entity in the Asian region, with a 32.8 percent compound annual growth rate (CAGR) in terms of subscribers, and 31.1 percent by revenue, for the period 2004 to 2009.

The latest buzz is that several foreign investors are penetrating the market. This week, two announcements were disclosed. South Korea's Samsung Electronics revealed its plan to construct a manufacturing plant in India that would produce wireless handsets. Bryan Wang In-Stat Analyst said Samsung is gaining market share in both GSM and CDMA area.

Meanwhile, electronic manufacturing services provider Flextronics also announced that it will establish a plant in India. With an initial investment of $30 million to $50 million, the facility will first produce mobile handsets. The company expects additional investments of $300 million to $500 million over the next 10 to 15 years.

Companies who have also expressed their interests in India also include Motorola, Nokia and Elcoteq Network Corp.

Motorola Inc. aims to add 1,000 more employees to its R&D efforts in India and vowed to become a more aggressive player in the cellphone market. The company is presently working with wireless operators in India to deploy sub-$40 mobile phones.

Nokia Corp. has commenced manufacture of wireless handsets in Chennai south of India. The cell phone giant recently obtained a $125 million contract from Bharti Tele-Ventures, India's primary GSM-based service provider. Under the contract, Nokia will manage the GSM/GPRS/Edge networks in eight regions. It is expected to provide managed services and expand Bharti's GSM reach within India. The contract also requires Nokia to deliver radio, core network equipment and services.

Finland's Elcoteq Network Corp. launched its manufacturing operations in India. The company said it will invest up to about $100 million to manufacture wireless handsets and other telecoms gear.

In-Stat's report also predicted Asia to become the largest regional mobile telecommunications market in the world over the next five to ten years. In 2004, there were nearly 740 million mobile users in Asia (including Japan, Australia, and New Zealand) with total revenue of roughly $180 billion, the company said. By 2009, Asian mobile telecom revenues will reach over $260 billion.

According to the hi-tech research firm, Asia is the most exciting market for investors, operators, equipment vendors, and handset manufacturers when looking at the 21.4 percent overall penetration rate (Asia total, including Australia and New Zealand).

"Asia has the engine for advanced technologies like Japan and South Korea, as well as developing markets with great potential, like India, Indonesia, Pakistan and of course China," Wang said.

Operators NTT DoCoMo and Singapore Telecom are on the lookout for investment opportunities to expand outside their home markets. Wang said Singapore Telecom is focusing more on the South East Asian and South Asian countries, while DoMoCo Inc. has a global vision. The company is reportedly reviewing its strategy due to failure of investment in the past five years. Recently, the Japan-based mobile phone operator jointly developed FOMA handsets with LG Electronics. The companies are supporting dual mode of W-CDMA and GSM/GPRS and also Docomo's i-mode service.

The Asia Wireless Annual Report from In-Stat covers wireless services, handset, and equipment markets in 13 countries that make up the Asian market. It includes forecasts for subscribers regionally and by country, as well as revenue forecasts by service, ARPU forecasts, and wireless equipment spending through 2009.

Kathryn S. Gerardino

Electronics Engineering Times- Asia

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