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Indian mobile subscriptions to cross 800 million by 2021: Ericsson

With handsets becoming cheaper by the day, internet penetration is bound to increase and mobile is the chief driver.

India recently overtook the US to become the second-largest mobile market in the world after China, and is on the cusp of mobile revolution, according to a report released by Ericsson.

Entitled India Ericsson Mobility Report, the Stockholm-based communications technology firm said that India would witness a dramatic increase in mobile broadband as its smartphone subscriptions and total mobile traffic is expected to increase four-fold and fifteen-fold, respectively, from 2015 to 2021, reaching 810 million smartphone subscriptions.

"Data traffic per active smartphone is expected to increase five-fold from 1.4GB per month in 2015 to 7GB per month by 2021 and 99 percent of the region's mobile traffic will be from data in the next five years," the report said. "Likewise, from 0.3 exabytes per month in 2015, total mobile traffic is expected to grow annually by 55 percent, reaching 4.5EB per month by 2021."

India saw the addition of 21 million mobile subscriptions in Q1 2016. Aided by liberal telecom policies, deregulation of foreign direct investment, and strong consumer demand, the telecom sector has been growing rapidly, the report said.

Quoting a report from sector regulator TRAI, Ericsson said as of 2015, there was a clear urban-rural divide in the telecommunications sector as the density in urban areas was three times higher than in rural areas and the divide was even higher for internet users.

"However, internet subscription has huge growth potential in rural and urban areas as total subscription stood at just 25 percent of the population," Ericsson noted.

Some 16 percent of Indian mobile consumers owned a smartphone at the end of 2015, compared to 44 percent globally.

"The number of smartphone owners in India will increase to 58 percent by the end of 2021, while at the same point in time it is foreseen that 81 percent will have a smartphone globally," the report said.

Most of the smartphone users in the country were active as far as calls and text messages were concerned and they aligned themselves with the top three global internet activities such as web browsing, emailing, and social networking.

"Around 15 percent of smartphone users in India make online video calls daily, and this is similar to the global average," the report said.

The smartphone users also hold the view that data was "more important" than voice, indicating the strong uptake of data services in the country.

"Though data speed is considered as the most important factor in determining both network performance and smartphone users' satisfaction with their respective operators, smartphone users were more satisfied with voice quality than data services," the report added.

Internet and Mobile Association of India (IAMAI) is not at all surprised with the Ericsson India report.

Speaking to ZDNet, IAMAI's Associate Vice President Nilotpal Chakravarti said that India being a mobile-first country, he was not surprised with the report.

"In fact, our own research also finds that mobile is set for exponential growth. With handsets becoming cheaper by the day, internet penetration is bound to increase, mobile being the chief driver," Chakravarti added.

Even ecommerce apps were growing in popularity as smartphone users were primarily accessing the internet on their mobile devices. This is expected to shoot up further as 3G and 4G subscriptions are likely to increase in the coming years.

The spurt in mobile broadband usage is facilitating m-commerce activities. Around 40 percent of smartphone users aged between 15 and 24 years purchase products using mobile payments on a weekly basis. Mobile banking activities are also increasing, with over 30 percent of users accessing banking websites via their smartphone, or using mobile banking apps.

While WhatsApp Messenger is the top mobile app in terms of the number of Indian consumers, followed by Google search and YouTube, ecommerce apps such as Flipkart, Paytm, and Snapdeal are growing in popularity in India.