The Indian mobile market is on a high growth trajectory. I was in two different Indian cities last week – part of my five day-five city tour across Asia. While in India, I was told by my colleagues that the mobile telephone network connectivity has become so bad that connections are dropping often.
I was in the Malaysian capital of Kuala Lumpur for a day and during a discussion with friends, a Malaysian expert told me that the prospects of two major Malaysian telecom operators look good owing to their investments in India.
I was in a lunch meeting with a senior executive of a major Southeast airline the week before in Singapore – the most talked about topic over lunch was the advent of Indian aviation players creating ripples in the market. I was floored by the experience flying Jet Airways during the Chennai to Kuala Lumpur flight. My colleagues ask me to hold judgement till I get to fly Kingfisher. I am not someone to be impressed so easily — my frequent flyer statement shows several hundred thousand miles with none other than Singapore Airlines. It is very likely aviation shall do an impressive repeat of the success of the mobile industry.
Let's look at the telecom scene: Southeast Asian telecom operators have made significant investments in Indian mobile service players. These players took a financial stake in established growing businesses. Maxis, Malaysia’s largest telecom player has invested in Aircel, and Singtel has invested in Bharti, the largest mobile player in India. As these players slug it out, Maxis reports that Aircel added 588,000 new subscribers during the second quarter alone, which is more than double Maxis' achievement in Malaysia. The other Malaysian player, Telekom Malaysia, is investing in the third Indian Indian player – Spice communications. All the three are aggressively expanding their Indian opoerations.
Monthy subscriptions inching towards six million additions per month – 5.9 million of them – are new mobile subscriptions, making India’s net addition the highest in the world, overtaking that of China – though the penetration levels may be lower. This New York Times article shows that china added 5.1 million subscribers, so the Indian run rate is 15% ahead of that of china.
Look at the growth — around 125 million subscribers have signed for mobile services in less than 15 years since the services were launched in the country. India believes that six or seven million monthy new subscriber additions are possible. Clearly liberalization and foreign investments all are helping the country in a big way — after all, the Indian mobile subscription rates are amongst the lowest in the world and handset makers like Nokia are helping the cause by coming in with low cost models and in the process helping India create high tech manufacturing clusters in places like Sriperumpudur, India’s likely answer to Shenzhen.
Three types of operators are alreasy investing here: the OEMs like Nokia, Motorola, the EMSs like Flextronics and Foxconn, and the component manufacturers who work with the OEM and EMS players. Dell is the recent addition planning to set up a manufacturing shop there. It's the most talked about thing in the tech sector today — some of the largest telecom-related opportunties for system integrators/service players are available in India.
Clearly opening up of the economy and the progress of the technology world is helping India advance faster and better — the only eyesore is the Indian infrastructure. I do not want to write about my experience in the Bangalore airport clearing baggage or the time that it took for me to clear immigration on my return via Chennai.