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Research and Markets: 2Q10 India Mobile Operator Forecast, 2009 - 2014: India will have more than 1 Billion Mobile Subscri

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Posted June 2, 2010

DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/8f3045/2q10_india_mobile) has announced the addition of IE Market Research Corp.'s new report "2Q10 India Mobile Operator Forecast, 2009 - 2014: India will have more than 1 Billion Mobile Subscribers in 2014 with Bharti Airtel taking Market Share of 21%" to their offering.

2Q10 India Mobile Operator Forecast, 2009 - 2014: India will have more than 1 Billion Mobile Subscribers in 2014 with Bharti Airtel taking Market Share of 21%

Mobile Operator Forecast on India provides over 50 operational and financial metrics for the Indian wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 4Q2011. Operators covered for India include: Reliance Communications Ltd. (RCom), Vodafone Essar Limited, Bharti Airtel Limited, Bharat Sanchar Nigam Limited (BSNL), and Idea Cellular Limited. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

Executive Summary:

Wireless subscriber growth in India continues to be one of the fastest in the world

+51.4% industry-average subscriber growth in 4Q.2009
The Indian wireless market keeps growing at an impressive rate. The operator-wide average subscriber growth (YoY) in 4Q.2009 was 51.4%, up from 48.3% in 4Q.2008.
There still is plenty of subscribers to go around in India as demonstrated by its low wireless penetration rate of 43.6% in 4Q.2009.
Among the operators covered in our forecast, Idea Cellular continues to have the highest subscriber growth rate (YoY) at 83.8% in 4Q.2009.
Also, both RCom (Reliance Communications) and Vodafone Essar continue to enjoy subscriber growth rates (YoY) of above 50%.
On the other hand, Bharti Airtel Limited saw its subscriber growth (YoY) decline to 38.8% in 4Q.2009, down from 55.3% in 4Q.2008.

ARPU levels continue declining

-31.4% industry average ARPU growth in 4Q.2009
India has seen negative ARPU growth for the past six years (since we've tracked this market).
ARPU declines are being led by the aggressive pricing strategy at RCom. RCom's ARPU growth rate was -40.6% in 4Q.2009 (down from -26.0% in 4Q.2008). Its monthly ARPU has declined to INR 149 in 4Q.2009.
Also, Bharti Airtel's monthly ARPU declined by -32.2% (YoY) to reach INR 209 in 4Q.2009.

Minutes of Use per Subscriber declined across operators in the latest quarter

-12.8% industry average MOU/Sub growth in 4Q.2009
The industry average MOU/Sub (Minutes of Use per Subscriber) declined to 375 minutes per month in 4Q.2009, down -12.8% from 4Q.2008.
Bharti Airtel continues to have the highest network usage among operators with MOU/Sub of 446 minutes per month in 4Q.2009 (down -11.7% from 505 minutes in 4Q.2008).
RCom's MOU/Sub declined by -19.5% in 4Q.2009 to reach 330 minutes per month.

EBITDA growth in the Indian wireless market turned negative in the latest quarter

-7.8% industry average EBITDA growth in 4Q.2009
The industry average EBITDA growth (YoY) in 4Q.2009 was -7.8%, significantly down from 9.6% in 4Q.2008.
RCom's EBITDA growth rate (YoY) declined significantly from 5.0% in 4Q.2008 to -24.5% in 4Q.2009.
EBITDA growth (YoY) at Bharti Airtel was also negative at -3.1% in 4Q.2009, down from 9.1% in 4Q.2008.

So what is IEMRs Forecast?

Total wireless subscribers in India to reach 1 billion in 2014

Our forecasting model predicts that the number of total wireless subscribers in India will reach 1 billion by the end of 2014.
The Indian mobile operator space is highly competitive with many players. The largest mobile network operator will continue to be Bharti Airtel whose subscriber base will increase from 118.8 million in 2009 to about 210 million in 2014.
We also forecast that mobile subscriber accounts at Reliance Communications (RCom) will increase from the current 93.8 million to about 186 million in 2014.

We expect a shift in market shares as new entrants gain more subscribers over the next several years

Bharti Airtel will continue to be the largest mobile operator, but we forecast that its subscriber market share will decrease from 22.6% in 2009 to 21% in 2014.
We also expect that market shares of Vodafone and RCom will be decreasing over the next five years to reach 16.8% and 18.6% respectively by the end of 2014.
In contrast, we expect that Idea will see its market share increase from 11.0% to 14.8% over the forecast period, 2009 - 2014.

ARPU levels will be declining further over the next several years, but not as drastically as in the past

ARPU levels in India will continue to fall across operators over the forecast period, but the rate of change will not be as dramatic as in the past, according to our model. Our model predicts that the industry average monthly ARPU will decline from INR 226 in 2009 to INR 115 in 2014.
We expect that RCom will continue to receive lower ARPUs than Vodafone Essar and Bharti Airtel. We forecast that its monthly ARPU will decline significantly from INR 186 in 2009 to INR 104 in 2014.

RCom will continue to enjoy higher EBITDA margins than Bharti Airtel and Idea

We expect that RCom's EBITDA margins will continue to be higher than those of Bharti Airtel and Idea.
Our model predicts that EBITDA margins (calculated as EBITDA/service revenue) at RCom, Bharti Airtel and Idea will be approximately 37.5%, 32.5%, and 29% respectively in 2014.

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