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Cell Tel boom in Asia - Views on News from Equitymaster
 
 
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  • Apr 3, 2000

    Cell Tel boom in Asia

    The demand for cellular phones continues unabated in Asia. As per Cellular Operators Association of India (COAI), the number of subcribers have been growing at the rate of 70,000 every month. In fact January witnessed the highest ever growth of 81,000 subscribers.

    Thus the total number of subscribers is close to 2 million. The growth in subscription is particularly encouraging considering the fact that CPP (Calling Party Pays) has not yet been implemented. This scheme renders calls made to cell phones free of cost. However the biggest carrot for subscribers has been the reduced incoming call charges. The other encouraging factor has been the decline in the handset prices, which have fallen by at least 30 %.

    In addition the handsets have shrunk in size making them more portable and have several other attractive features such as roaming facilities, data on stock markets, and other news of general interest. The range of such cellphones has increased dramatically to cover wider areas. Shortly in line with convergence mobile phones are to become internet compatible (by use of wireless application protocol) enabling subscribers to bank through the mobile and also access the net. The theory of convergence envisages the merging of telephony, Internet and the computer. Licences given to several private operators has also led to intensified competition, and improvement of quality and reduction of prices.

    In line with this and due to the several enhanced features of the cellular phone, demand has gone up several times. In China for example subscription is expected to touch 74 million by the end of 2000 out of which net addition would amount to 31 million subscribers in year 2000 alone. This figure is expected to go up to 250 million by the end of 2004 representing a quantum jump.

    Another encouraging factor is the increase in talk time. Due to the reduction in tariff, subscribers are engaging in longer conversations, which is adding to the revenue of operators.

    Thus there is a bright future for mobile telephony in the coming years and telecom operators in this area would definitely reap the benefits of the cellular revolution that is sweeping across India and China.

    However with competition increasing by the day, quality of service as well as quality of handsets have become of paramount importance with the consumer veering more and more towards efficient service providers. In addition the consumer has become increasingly price conscious.

     

     

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