Gartner sees 56m cell connections by end-2004

Gartner, the international research and advisory firm, expects cellular connections to touch 56 million by end of 2004, representing a steep growth of almost 96 per cent over the current year.

2004 is set to break all records for growth in the Indian mobile market, driven by the introduction of full-mobility CDMA cellular services and an aggressive competitive response among GSM operators, according to a press release.

An unparalleled growth in the CDMA cellular market is driving major changes through the Indian wireless industry, prompting unprecedented co-operation between handset vendors and carrier services in the country.

"The pace of growth has been accelerated by India's adoption of a unified licensing regime, which has legitimised the use of limited-mobility CDMA services for wide-area cellular operation", says Bertrand Bidaud, vice-president, Asia-Pacific, Gartner.

"These changes are expected to reshape the cellular industry landscape in the India during 2004, with both GSM and CDMA operators reducing tariffs and bringing down barriers to entry", says Kobita Desai, principal analyst (telecom), Gartner.

However, volatility in the cellular market is expected to continue for at least next 18 months as the main operating groups carve out their future market positions, while some players attempt to establish niche positions, says Gartner.

The CDMA market has been driven by the low price of service tariffs bundled with subsidised prices of handsets.

Samsung and LG enjoyed an early mover advantage, working with operators such like Reliance to install the infrastructure, supply local-branded handsets and work through the problems of service deployment.

Samsung in the third quarter of 2003 enjoys a market share of 29.6 per cent in the mobile handset market (CDMA& GSM) and LG 22.8 per cent.

Nokia and Motorola started to make their presence felt in the CDMA market, introducing a range of new devices and securing sizeable supply agreements with operators, the release added.

Nokia, in the third quarter of 2003 in the Indian mobile handset market enjoys 32.6 per cent market share.

The GSM operators have risen to the challenge poised by the CDMA services and have responded with aggressive promotions and handset subsidies to maintain their share of net new connections, the Gartner release states.

Desai points out that, "the relatively stable situation in the GSM market reflects the efforts made by some major handset vendors during the past 18 months to regularise distribution channels and scale down black-market activity, which has dominated the Indian handset market in the past years".