India overtakes U.S to become the 2nd largest smartphone market in 2016

mobile-economy-india-gsmaWith an installed base of 275 million devices in 2016, India has overtaken the U.S to become the world’s second-largest smartphone market, says the “Mobile Economy: India 2016” report from GSMA.

At the end of June 2016, 616 million unique users had subscribed to mobile services in India. At this rate, India will have almost one billion unique mobile subscribers by 2020, which will account for 68 percent of the population (up from 47 percent in 2015).

The growth is attributed to the growing economic standards, falling device prices and operator investments in network coverage & quality.

As telecom technologies evolve, the number of 3G/4G mobile broadband connections is forecast to reach more than 670 million by 2020, 48 percent of the total connection base. The number of 4G connections is forecast to grow rapidly, growing from just 3 million at the end of 2015 to 280 million by 2020.

Operator investments (CAPEX) are estimated to grow to $34 billion (INR2.3 lakh crore) for the period 2016 to 2020.


The report also suggests India should modernize regulations to the realities of the new digital ecosystem by thoroughly reviewing the current licensing framework and removing outdated and ineffective regulations.

Also, considering the scarcity of spectrum for telecom, the government should continue to free up identified available spectrum for mobile broadband growth, GSMA said.

“With this report, all signs point to a period of tremendous growth for India’s mobile economy, which will strongly support and enable the government’s ‘Digital India’ initiative aimed at providing broadband connectivity to all,” said Mats Granryd, director general, GSMA.

“To fully realize India’s tremendous market potential, review and reform in key areas, including modernizing regulation and long-term planning for spectrum allocation, would accelerate mobile broadband access and adoption across the country,” Granryd added.

In 2015, India’s mobile industry generated economic value equivalent to 6.5 percent of the country’s GDP, a contribution that amounts to more than $140 billion (INR9 lakh crore). This is expected to grow to $210 billion (INR14 lakh core) by 2020.

Mobile operators and the ecosystem provided direct employment to approximately 2.2 million people in India, as well as indirectly supporting 1.8 million additional jobs in other industries and sectors that benefit from the activity of the mobile industry, particularly in the direct supply chain. This brings the total impact of the mobile industry to nearly 4 million jobs in 2015.

Commenting on the role of mobile in delivering the government’s Digital India vision, GSMA added, “As the dominant platform for internet access, given the lack of fixed line infrastructure, high levels of mobile ownership and significant operator investment, mobile has the potential to advance financial access, improve information, and raise productivity throughout India’s economy.”

As of mid-2016, around 430 million people had access to mobile internet services, a figure that will increase to almost 670 million by 2020, or about half the population. This still lags the regional average of 63 percent penetration.

Financial inclusion is also growing in India. Around 65 percent of Indian adults have an account with a financial institution, and there is significant room to increase adoption of financial services through mobile technology.

Digital inclusion can extend various economic and social benefits to previously unconnected populations, fuelling a virtuous circle that reduces poverty, improves infrastructure and services, and further increases internet access and usage, said Granryd.

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