The Indian telecommunications market has experienced a considerable number of challenges in the last few years due to constant regulatory disputes and a hostile business environment, which includes an aggressive price war that has eroded operators ' profitability. Despite the country ' s significant growth potential, the industry is struggling to capitalize on the opportunities, which will remain the central theme in the near future as we do not expect the market to reach a swift resolution of these complicated issues.
Key Data Trends
By March 2013 this year, the Indian mobile subscriber base was back on a gradual upward trend. By end-2013, we envisage 891mn subscribers.
We expect ARPU levels to trend higher due to 3G and value-added services; the industry is prone to downside risks such as aggressive price competition, with a number of key operators having recently slashed their 2G data charges.
Looking longer term, proposed legislation to allow foreign operators to have up to 100% stake in local telecom companies would inject much-needed funds to rollout the nation's 3G network infrastructure.
We forecast slow but steady fixed broadband subscriber growth as operators and consumers opt for cheaper and more convenient mobile solutions.
India is in 13th position in the Asia Pacific Telecoms Risk/Reward Ratings, with a Telecoms rating score of 46.5 in Q313 as per BMI.