Wireless Broadband Penetration can Unleash $80 billion GDP Growth

GSMA , the association of mobile phone operators in the country, believe a 10-per cent growth in mobile broadband will add Rs3,50,600 crore ($80 billion) to India’s GDP by 2015. Analysys Mason has prepared this report for GSMA to assess the direct and indirect economic impact of wireless broadband in India. The exclusive findings of the Analysys Mason report reveal that allocating just 5MHz of additional 3G spectrum per licensee could increase mobile broadband penetration by more than 35%, which would increase the number of 3G users to almost 160 million by 2015. This would also increase national broadband penetration by 3.3%, resulting in an INR538 billion increase to India’s GDP by 2015. By this time, mobile broadband could contribute a total of INR2190 billion to the Indian economy. India lags fellow Emerging BRIC Peers due to a weak infrastructure base for wireline based broadband deployment. This is due to various reasons like lack of adequate investment, excessive bureaucracy, a far too dispersed population outside the main cities and an absence of marginal profitability. This has resulted in a dearth of content, applications, service models and device categories which can address the up-and-coming mass market requirement. We see that the total cost for a fixed broadband connection accounts for 20% of the per-capita consumption basket for Indian consumers. The deployment further faces challenges like time-to-market, operator economics and the nascent ecosystem. Mobile broadband delivers the cost-effective scalability that India needs to overcome these issues. Local mobile brands are the key to unlocking the huge Wireless Broadband Devices potential across the hinterland. Micromax, Spice and Videocon now have a 22% market share in QE-Mar2010 from 7% in QE-Mar2009. The report suggests these players are expected to increase investments in local manufacturing and expand their markets globally. Local brands are priced competitively, and the average mass market customer is increasingly opting for something cheap which gets the job done, as implied by the rising market share. A larger reach of mobiles compared to PC / laptops will be the key driver for growth of retail consumption on mobile in India. Users of mobile banking and related services globally is forecasted to grow at a CAGR of 59.2 % to reach 894 million users in 2015. A Government Roadmap is vital to transform this potential into reality, and the benefits are clear for everyone to see. Very often, we as a country lose out on developmental projects due to unnecessary snags, but this time, we are at a major crossroads which can see an increase in economic productivity of the work force as a result of access to wireless broadband services. India is the second largest mobile market in the world (behind China, obviously) and the Government should speed up the enactment of the proposed National Spectrum Act to transform our Industry through a thriving export market, with the power of Mobile Broadband.

[via WATBlog.com - Web, Advertising and Technology Blog in India]