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India's Mobile Phone Market Grows Rapidly Despite Economic Slowdown


India's mobile phone industry is growing at a furious pace despite the country's slowing economy. India is the world's fastest growing cellular market.

For over 10 years, 35-year-old Shankar Das, a plumber, earned about $100 a month working in a New Delhi company that provides services such as plumbing, carpentry and painting.

Earlier this year, he quit, and invested in a mobile phone. He offered his services to customers at half the price which the company charged. Within months, Das has built up a huge clientele, and has more than tripled his earnings.

Das says he could never have struck out on his own without the mobile phone, on which his customers contact him anywhere, anytime.

He is among nearly 25 million people who bought mobile phone connections in the first two months this year - the highest number ever during that period.

The economic slowdown has failed to dampen growth of India's mobile phone market. Connections are being added at the fastest pace in the world. Many of the new subscribers are those working on their own such as vegetable sellers and taxi drivers, or low income earners such as maids and laborers.

Girish Trivedi, a senior analyst at consultancy Frost and Sullivan, says mobile phones have become a handy tool for millions of people who work in the unorganized sector.

"We have seen that mobile phones as a utility tool has got a mass acceptance, in the sense people can use to improve their livelihood, and this has actually helped to a large extent to grow this particular service," said Trivedi.

Affordability is driving growth in a country where average earnings are low. Call rates have dropped over the years to just two cents for a one minute call. Cheap handsets introduced into the market are available for less than $20. This has put mobile phones within the reach of those earning less than $100 a month.

About 375 million people in the country now have mobile phone connections. Trivedi says that in a country of over a billion people that still leaves huge room for growth.

"We are still below 35 per cent penetration level in the country. We have practical examples around the world of countries having shown growth even beyond 100 per cent penetration level. So there is a huge amount of market requirement which still needs to be filled in," said Trivedi.

Phone companies say they expect to see most of the growth in the future come from rural areas where two thirds of India lives. The Cellular Operators Association expects that the number of mobile phone subscribers will rise to 525 million by 2010.

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