1) The document analyzes forecasts for total mobile subscriptions in South India using logistic, Gompertz, and Bass diffusion models.
2) It finds that the Gompertz model best fits the data and forecasts subscription numbers in December 2013 to be around 189.75 million.
3) The analysis also examines factors like new technologies and foreign direct investment that could impact forecast accuracy and concludes the South Indian mobile market is mature with slowing growth.
3. Logistics & Gompertz function
LOGISTICS FUNCTION
GOMPERTZ FUNCTION
Type of function
Sigmoid
Sigmoid
F(t)
y = L / (1 + Ae-Bt)
y = Aebect
Modified eqn (Linear form)
Y = ln (y/L -1) = ln A – Bx
Y= ln (ln (L/ y)) = - lnb + kt
Point of inflection
dY/dt = L/2
dY/dt = L/e
L (Saturation)
L = 276,211,262
L = 375410027
Intercept
lnA = 7.97
lnb = 2.42
Slope
-B = -0.048
k = -0.014
Final equation
y = 276211262/(1+e7.97*e-0.048t)
y = 375410027/ee
Forecast for Dec 2013
236140297
189758374.6
Coeff. of determination (R2)
0.785
0.974
Square Mean Error
8.49E + 14
0.128
Calculations
Embed file
Embed file
2.42-0.014t
4. BASS MODEL FUNCTION
S(t)
S(t)=p+q*N(t-1)/m)*(m-N(t-1))
Modified eqn (Polynomial form)
S(t)=aN(t-1)^2 + bN(t-1) + c
a
3.2*10^-10
b
0.061
c
83842
Final equation
y = -0.061*(1374459-N(t-1))
Forecast for Dec 2013
175,212,483
Coeff. of determination (R2)
0.7
Mean Square Error
9 E+!3
Calculations
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5. Risk Analysis
Potential factors for distortion of forecast data :
Introduction of new technology- 3G (2009)
Decline of growth
20000000
FDI
Effect of investment on data in:
2001-02
2005-06
2009-10
18000000
16000000
14000000
12000000
10000000
80000000
60000000
40000000
20000000
0
3/1/1997
12/1/1997
9/1/1998
6/1/1999
3/1/2000
12/1/2000
9/1/2001
6/1/2002
3/1/2003
12/1/2003
9/1/2004
6/1/2005
3/1/2006
12/1/2006
9/1/2007
6/1/2008
3/1/2009
12/1/2009
9/1/2010
6/1/2011
3/1/2012
12/1/2012
Subscribers
Month
Total (y)
FDI in crores
1999
212
2000
288
2001
784.16
2002
3938.46
2003
907.73
2004
408.78
2005
569.54
2006
2774.18
2007
2155.08
2008
5102.61
2009
11726.87
2010
12338.3
2011
7542
2012
9012
6. Conclusion
Existing Scenario
•
The mobile subscription market is already in mature phase
•
The growth rate is very slow
Study outcome
•
Gompertz and logistics curves forecast both the saturation level and growth rate
•
The numbers in December, 2013 will be reaching closer to the saturation level.
•
Growth rate will further slow down.
Suggestions
•
South Indian market will not be suitable for a new player in the market
•
Entry in the market will be very costly as the scope for growth is low
•
Established players also need to focus on their existing strategies