An Analysis of the Diffusion of Fixed Line and Mobile Phones in India

Telephone subscriber base is increasing extensively with a fast diffusion rate in India. Due to increasing innovative marketing strategies, extensive network reach and competitive pricing mobile phones are becoming the dominant means of accessing communication, which may replace fixed line telephones in near future. The penetration rate of mobile phones was 30.2% in 2008 while as of December 2007 it was only 20.7%. The newly elected UPA government announced to increase rural tele-density in the next 5 years as part of its mega plan target. Therefore, the objective of this paper is to analyse growth of subscribers (fixed line and mobile phones), share of rural-urban density and substitution pattern of fixed line telephones and mobile phones in India. We have used growth curve for trend forecasting and technology substitution model for analyzing rural-urban phone density. The growth momentum for the shift in fixed line and mobile telephony has also been separately analysed. Results indicate that India has a huge market potential of telecom growth and mobile phones may replace fixed line telephones in coming years because of fast penetration rate of mobile phones