India's 3G subscriber base to cross 200 million by 2016; growth likely to slow down after 2015- Evalueserve!

India’s 3G growth story hasn’t been good so far. Marred with indoor coverage issues, inconsistent coverage patches, not so aggressive 3G pricing and high costs of 3G handsets has put adverse impact on subscriber growth till date.

But according to Evalueserve, this is likely to change soon & India would likely to be key growth market for 3G & allied VAS during year 2011-14, where its 3G subscriber base would grow at 30{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} CAGR to reach 200 million by 2016.

Let’s summaries key findings of the report here:

• Along with 3G services, 3G enabled handset market will grow at 41{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} CAGR in between 2012-16, to reach 680 million 3G enabled handsets by 2016.
• Apart from 3G subscribers,India’s total mobile subscriber base will grow at 10{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} CAGR from 2011-2016. At presentIndia’s total subscriber base stands at 850 million, which is likely to grow to 1.5 billion by 2016.
• Coupled with Operator’s aggressive market strategy it’s likely that 62{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of the new subscriber additions will come from rural segment in coming years.
• According to estimates,India’s Mobile VAS subscriber growth rate would be 28{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} CAGR annually and there will be 430 million MVAS subscribers by 2016.
• Among MVAS, Mobile TV and Video Streaming along with m-Banking services will be key drivers for MVAS growth inIndia, growing at 43{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} CAGR.

Though report predicts that 3G subscriber growth is likely to slow down after year 2015, mainly because 3G would reach market maturity, and introduction of 4G/LTE/WiMAX would take pie of subscribers, report doesn’t mention impact of 2G to 3G migration on subscriber base. By 2015, as 3G handsets cost would come down significantly, many of the existing 2G subscribers would be riding on MVAS services to switch to 3G. There will be significant exodus after 2015 for MVAS services.

Since introduction of 3G services, the uptake isn’t quite well and subscribers in metros are mainly complaining about coverage & speed issues. This will always be the case in growth phase of any new technology introduction and once reached to maturity phase perception of 3G services is likely to be improved.