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India's Mobile Phone Market Fastest Growing in World


India's mobile phone market has become the fastest growing in the world, with Indians adding nearly six million new connections every month. As Anjana Pasricha reports from New Delhi, much of the growth is among low-income consumers.

Ramu Prasad, 40, has been wheeling his cart loaded with fresh vegetables through a South Delhi residential area every morning for the past 15 years. He has many regular customers, but until recently, he could only do business with them when they were home.

Prasad solved the problem six months ago by purchasing a mobile phone.

Prasad's customers now place their orders from anywhere, over his mobile, and he delivers the vegetables when they are in the house.

When mobile phones were introduced here more than a decade ago, they were considered a luxury. But low calling charges and cheap handsets have brought them within the reach of tens of millions of people like Prasad.

Telecom companies are going all out to woo such customers, offering them deals that make cell phones affordable for even those who earn as little as $125 a month.

Handsets are available for $45. Users can buy new pre-paid phone cards for less than 50 cents. Companies offer consumers the option of paying one lifetime fee of about $25, and never having to pay for incoming calls again. In most of the world, mobile phone operators charge for incoming as well as out-going calls.

As a result, low-income, self-employed people like maids, cooks, taxi drivers, plumbers, and construction workers are snapping up mobiles at a frantic pace. Six million new connections are being added every month. The Telecom Regulatory Authority of India says this is the fastest pace in the world.

Two hundred fifty million people now have mobile phones in India. The government expects that number to double by 2010.

Naveen Mishra, a senior marketing analyst with the telecommunications consulting firm IDC in New Delhi, says that in a country of more than a billion people, there is still a vast market to be tapped.

"If you see the penetration, we are still at 20 percent, not more than that. So that leaves a huge opportunity," said Mishra. "It is a very hot market, that is why people are eying the Indian market."

So far, most of the growth is coming from urban areas. Telecommunication companies say they will invest billions of dollars in coming years to expand their presence into the country's vast rural areas, where most of the population lives.

International telecom companies are joining domestic firms in rushing to tap into all these potential customers. The world's largest mobile phone company, Vodafone, established its presence earlier this year by acquiring a controlling stake in Hutchison Essar, an Indian-Hong Kong joint venture.

This month, U.S network provider AT&T applied for licenses to operate in India in partnership with a local group.

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