How does India compare with Rest of World in Mobile Broadband Adoption ?

LTE subscribers formed 4% of global wireless subs and 12% of mobile broadband (3G or LTE) subs globally at end of Mar 2014. At the end of Mar 2014, 74% of LTE subs were in three markets (US, Japan and South Korea). Each of these three markets ranks high on overall wireless broadband penetration (defined as % of 3G/LTE subs as % of total wireless subs) – US at 91%, Japan at 100% and South Korea at 95%. In other words, these countries had a very sizable 3G subs base to be tapped into as potential LTE customers.

The Following Chart Shows the Comparison of 3G vs 4G LTE Subscribers across Various Markets Globally

There are other variables at play, of course (like ARPU levels, handset upgrade cycles, presence or absence of handset subsidies, investments made by operators, quality of LTE networks, quality differential between LTE and 3G networks). Some of these other variables have meant slow LTE adoption in several other markets with sizable 3G penetration, especially in Europe. From this data we can infer that a sizable 3G subs base is a necessary but not sufficient condition for rapid LTE adoption.

Where Does India Rank in Mobile Broadband Adoption ?
An abysmal sub-6% of total wireless subscriptions in India are on 3G. It is also instructive to compare India with China. Chinese operators started launching 3G networks commercially in 2009 while the Indian operators did so a year later in 2010. As at end-Mar 2014, China had a total of 461 mn 3G subs (37.1% penetration);
India? 52 mn subs (5.8% penetration). The Indian consumer is yet to even adopt 3G in a meaningful way.

Low 3G penetration, LTE handset challenges, challenges of offering circuit switched voice (for an LTE-only operator; VoLTE is extremely expensive to roll out), and fairly challenging economics are some of the hurdles an operator needs to overcome to drive accelerated LTE adoption in India. The key question then is whether Reliance Jio Infocomm can achieve this while (or by) being disruptive? From the above Data, expectation of an accelerated 4G LTE adoption is fraught with risks for 4G LTE only operators.