Mobile phone uptake in India accelerates

Demand for smartphones in the country is being helped by the wider availability of budget handsets

An Indian mat vendor speaks on a phone at a market in Chennai. The country as seen mobile uptake surge but the potential is still huge. Arun Sankar/AFP

India's mobile phone market is on the rise, driven by factors including lower data costs and the availability of more budget smartphones being manufactured in India.

“In the last three years, 266 million mobile connections  were added [in India],” said Manoj Sinha, India's telecom minister, speaking a conference in New Delhi. “We had a meagre five telecoms equipment manufacturing units in 2014. Today we have a staggering 118 such units manufacturing more than 225 million mobile handsets.”

He added that while India' is the  “world’s second-largest consumers of the internet, more than two thirds of our population is yet to be online”.

Demand for smartphones in India is being helped by the wider availability of budget handsets manufactured by Indian companies, including brands such as Micromax, and cheap phones from China. Chinese smartphone makers Vivo and Xiaomi have manufacturing plants in India, Price wars between telecoms operators in India are also making owning a smartphone more affordable for many.

Shipments of mobile phones into India reached 288 million last year, up 16 per cent on the previous year, according to the International Data Corporation (IDC), a market research firm. Samsung phones accounted for the largest share of smartphones, at close to 25 per cent in 2017. But it was overtaken by the Chinese smartphone manufacturer Xiaomi in the last quarter of  the year.

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“The Indian market resumed its double-digit growth after a temporary slowdown in 2016 caused by factors such as demonetisation,” according to IDC. “This contrasts with China, the world's largest smartphone market that saw its first decline this year, while the USA was relatively flat.”

The firm “expects the Indian smartphone market to continue double-digit growth for next couple of years”, according to Upasana Joshi, a senior market analyst at IDC India.

RS Sharma, the chairman of the Telecom Regulatory Authority of India, at the conference in Delhi said that the expansion of the sector was vital to economic and social development in India.

“India lacks physical infrastructure such as roads, water, development in cities,” he said.

“Technology enables us to overcome these difficulties and leapfrog such obstacles. Technology should be inculcated as an active medium for social transformation. Therefore, it needs to be ubiquitous and available.”