Indian mobile market hots up
New Delhi, January 7:
India’s mobile phone market is red-hot, adding nearly seven million customers a month according to latest figures, and stirring global interest in the auction of the country’s fourth-largest wireless operator.
Already four players, including Vodafone, the world’s top mobile phone company, are jostling for position in the multi-billion-dollar race for India’s Hutchison Essar, controlled by Hong Kong-based Hutchison Whampoa. The Indian mobile market has “great potential”, said Britain’s Vodafone.
India added 6.8 million new mobile subscribers in November, the latest month for which figures are available. “India’s mobile subscriber base is increasing phenomenally every year — one customer is added every second,” communicatio-ns minister said. India now has more than 183 million teleph-one subscribers, of which over 140 million are mobile users.
“By 2010, India will have more than 500 million mobile subscribers from the current base,” Maran said. The contest for Hutchison-Essar got going in earnest in December, when Hutchison Whampoa, controlled by Hong Kong’s billionaire tycoon Li Ka-Shing, made it clear it wanted to sell out its 67 per cent stake in the Indian mobile company, which has 22 million subscribers.
As new bidders jump into the fray, the valuations for Hutchison-Essar have zoomed to over $20 billion. However, this hasn’t deterred the potential suitors, which include a clutch of Indian companies such as Reliance Communications, India’s second-largest mobile phone firm, and the Hinduja group, with interests from oil to banking. Indian steel-to-shipping group Essar, which holds the minority 33 per cent stake in the company, is another possible bidder, while other companies such as Maxis Communications of Malaysia and Egypt’s Orascom have also been mentioned.
India has come a long way from a decade ago, when teledensity — the number of pho-nes per 100 people — was aro-und three in the country of 1.1 billion people. By November 2005, teledensity had risen to 11 and that climbed by November 2006 to 16, according to the Telecom Regulatory Authority. “There has been a steep growth in teledensity in the past 12 months,” the telecom body commented. India is now the world’s fastest growing major mobile market, outpacing even China, analysts say. A no-holds-barred price war is helping drive the cost of calls down to as low as two cents a minute, and a mobile connection can cost as little as four dollars a month. Nevertheless, profitability of the sector is strong.
Second-quarter net profit of Bharti Tele-Ventures, India’s largest mobile phone firm by subscribers, rocketed by 79 per cent to $207 million from the same period a year earlier. The firm’s profits jumped due to a nearly doubling of subscribers.