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Indian Economy to Grow by $2.7 Billion for Each Percentage Rise in Mobile Broadband Penetration

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Increasing mobile broadband penetration in India can have significant benefits for the national economy each percentage point increase could contribute an estimated INR162 billion (USD2.7 billion) to India's GDP by 2015, reveals Analysys Mason's latest study.

According to the study, delivering widespread broadband access across rural and urban areas of India will be crucial if the government is to reach its connectivity target of 100 million connections by 2014. Mobile broadband is the most scalable and cost-effective means to achieve this goal, while delivering a wide variety of social and economic benefits to India.

The study was commissioned by the GSMA to understand the benefits that mobile broadband could deliver to 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 could increase the number of 3G users to 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.

The report highlights the impact of increased mobile broadband penetration on a wide variety of industry sectors. These include the creation of new revenue streams in the consumer and retail sectors, financial services, social services (such as education and healthcare) and corporate vertical sectors. The revenue impact that mobile broadband could have on each sector by 2015 is as follows:

  • consumer/retail (m-advertising, m-entertainment, m-commerce): 82% increase in mobile broadband-enabled revenue to INR187 billion
  • financial services (m-banking): 67% increase in mobile broadband-enabled revenue to INR205 billion
  • social services (m-learning, m-health, m-government): 101% increase in mobile broadband-enabled revenue to INR63 billion
  • corporate/verticals (m-farming, m-enterprise, m-utilities): 60% increase in mobile broadband-enabled revenue to INR60 billion.

"Mobile broadband adoption will stimulate the availability of new services across a wide range of different markets, including retail, healthcare, education and financial services," said Jaikishan Rajaraman, Senior Director, Asia Pacific, GSMA. "The current lack of sufficient spectrum remains a formidable obstacle to India benefitting from these services and meeting its broadband connectivity targets."

The report's findings also reveal the impact that broadband connectivity has on economic productivity across industry sectors and the benefits it will deliver to the Indian people. Kunal Bajaj, Partner and Director India at Analysys Mason, explained, "The study shows that the total cost of ownership for a fixed broadband connection accounts for at least 20% of the per-capita consumption basket for Indian consumers. In addition to affordability issues, the deployment of large-scale fixed broadband access networks faces challenges in terms of time-to-market, operator economics and the nascent ecosystem. Mobile broadband will deliver the cost-effective scalability that India needs to overcome these issues."

Further details can be found in the report.

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Tags: target  India