India Becomes Mobile-Phone Market With a Billion Subscribers

Mobile Phone Users And Stores Ahead Of Indian Telco Earnings

A taxi driver talks on mobile phone as sits inside his taxi in Mumbai, India, on Oct. 19.

Photographer: Dhiraj Singh/Bloomberg
  • China is the only other country with more mobile phone users
  • With 12 operators, India still has among the cheapest tariffs

India’s number of mobile-phone subscribers topped 1 billion, becoming the only country after China to cross that milestone.

The number of subscribers in October reached 1.03 billion, up 0.7 percent from the preceding month, the Telecom Regulatory Authority of India said in a statement on Wednesday.

Though phone bills in the country are among the cheapest in the world, India’s subscriber base has surged over the years to a size that’s more than triple the U.S. population, underscoring the country’s growing economic influence. Top Indian carrier Bharti Airtel Ltd. alone has more than 200 million subscribers.

The huge user base is also the most spoiled for choice. As many as 12 operators fight for subscribers in the third-largest Asian economy, driving down tariffs and hurting profits. The imminent launch of Mukesh Ambani-controlled Reliance Industries Ltd.’s $15 billion fourth-generation services in early 2016 is set to intensify the competition further.

Concerns about added competition prompted Fitch Ratings to downgrade its 2016 outlook for the Indian phone industry to negative from stable in November. Fitch said it expects only the largest five or six operators to emerge from the likely shake-out in the industry as smaller players exit or get acquired.

Reliance Communications Ltd., controlled by Ambani’s billionaire younger brother, is in merger talks with smaller rival Aircel Ltd. and is looking to close its deal for AFK Sistema’s Indian wireless unit, in what would be a three-way merger. Idea Cellular Ltd., the current No. 3 wireless carrier, has announced the purchase of airwaves from Videocon Telecommunications Ltd.