Bharti Airtel - The Mobile Industry in India

At Bharti Airtel, we received a very interesting overview of the state of the wireless/mobile industry in India. There are already more than 230 million telecom subscribers in India today and yet there is still great opportunity for growth at this time. Wireless penetration is only 17 percent (versus 37 percent in China and 100+ percent in the UK) in a country that has a population of almost 1.1 billion. In fact, the number of mobile subscribers in India has been growing at a staggering rate: In March of 1999, there was only 1 million subscribers in the entire country and as of July of 2007, there were 189 million. And in terms of wireless access, 62 percent of the country is covered.

One of the most interesting points of the presentation focused around the type of subscriptions that mobile carriers in India are selling and how the subscriptions models differ from the U.S. In the U.S., it is common to give away a phone to encourage subscribers to sign a long-term contract. In India, however, this is very difficult to do that. Many companies tried this out at first but lost quite a bit of money because consumers would take the free phone and “not come back.” As a result, 94 percent of the mobile phone users in India today have pre-paid subscriptions. This means there are very few long-term contracts, which in turn, creates a whole different type of challenge for mobile carriers. How do you keep your customers? Competition for subscriptions is very fierce and presents a totally different challenge than in the US. This is not too much of a problem at the present time because carriers are adding almost 7 millions subscribers a month, but when the market will be more saturated, mobile carriers will have to find new ways to retain customers.

--Cedric Vanhaver