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GSMA Says India Has Only 350 M Mobile Subs, 107M 3G + 4G; We Disagree

In a pitch for policy change in India, the GSM Association has said that for the nearly 900 million mobile connections in India, there are only 350 million subscribers. Some data points from the report, which you can download here, even though we don’t find their data reliable:
– GDP: The Mobile ecosystem generates approx 5.3 per cent of GDP for India. By 2020, it will contribute $400 billion to India’s GDP, and invest $9 billion in Infrastructure, and $34 billion to public funding.
– Employment: The Mobile ecosystem supports 730,000 jobs directly and 2 million jobs indirectly. By 2020, it will create 4.1 million additional jobs.
– 3G and 4G adoption is projected to increase by 31 per cent – from 107 million 3G and 4G connections in 2013 to 409 million connections in 2017.

A few issues with the data points provided here:
– 3G and 4G connections: Based on the results announced last quarter (end of June 2013), Airtel (6.8M), RCOM (7.7M), Idea Cellular (5.5M), Vodafone (3.7M) have a combined 23.7 million 3G subscribers. These operators accounted for 76.65% of India’s active subscriber base, and assuming that they accounted for the same percentage of 3G connections, this suggests that India has around 30.92 million 3G customers. Even assuming that this base triples by the end of the year only gives you 92.76 million 3G connections. Our calculation doesn’t take into account 4G connections, which the report says were 400,000 in 2012. That is inconsequential, still.

We don’t think that India will have 107 million 3G and 4G connections by the end of 2013, and we would recommend that our readers don’t take this number from BCG seriously.


(Nice looking infographics don’t have to be true. Just nice enough for presentations)

– Mobile connections: As of the end of July 2013, India had around 874.88 million mobile connections, around 731.397 million of them were active. The GSMA contends that India only has around 350 million mobile subscribers. This means that there are more than 2 active mobile connections per actual subscriber. At a 350 million level, this appears to be highly unlikely to us.

However, showing that the mobile subscriber base is low, the performance of data businesses and the potential in job creation, GDP allows the GSMA to make its case for policy change. This is just lobbying using data, and the report recommends what the GSMA wants, all of which, incidentally, we agree with. The telecom sector has been crippled by ambiguous and almost vengeful policy decisions, and now we’re almost in a stage where no one wants to take a decision because it would look suspicious. Anyway, the recommendations:

“1. Spectrum Management: Following international guidelines, the government is encouraged to allocate and release more harmonised spectrum in larger blocks, which will prevent unnecessary market fragmentation. However, at present, approximately 60 per cent of the relevant spectrum is yet to be allocated and large blocks specifically identified for mobile are occupied by other sectors.

To increase the efficiency of spectrum use, the government is urged to clear the way for market-driven sharing and trading of spectrum resources. The government is also encouraged to adopt lower spectrum reserve prices. TRAI’s recent proposal is a step in the right direction.

2. Universal Service Obligation Fund (USOF) Levy: India has one of the world’s highest universal service levies – five per cent of operating revenues – which would benefit from a full review. The report states the government should focus on fostering public-private partnerships for the implementation of projects and seeking alternative funding sources, rather than constraining industry development with ineffective financial mechanisms, such as the USOF levy.

3. Balanced and Evidence-Based Radio Frequency Emissions Requirements: The recent regulation adopted by the Indian government goes beyond global standards, increases network costs and can reduce service quality. Best practice for radio frequency limits, based on International Commission on Non-Ionizing Radiation Protection (ICNIRP) and endorsed by the World Health Organization, should be followed instead.

Enabling Power of Mobile: Increased penetration of mobile technology in India will bring with it many socio-economic benefits. In agriculture, mobile solutions improve yields and support farmers with enhanced contact with markets. Greater access to healthcare and reduced mortality are also facilitated by mobile solutions, while mobile technology brings financial services to rural and underserved communities. By utilising the power of mobile, “education for all” is a goal that is increasingly within reach. Government has an important role to play in all of these areas by removing barriers to the integration of mobile solutions in an increasingly connected world.”

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