A new study release by Gartner predicts that revenues from Indian cellular services will reach $24 billion by the end of 2009, with a penetration of 30 percent and more than 300 million connections. The Indian cellular market grew 67 percent in 2004 but will need only a 35.6 percent compound annual growth rate (CAGR) to meet this prediction. Given the country’s economic growth and lack of a core landline system, this seems quite reasonable.

The Gartner report continues to predict that the Indian cellular market will account for 11 percent of the overall Asia Pacific and Japanese market in 2009, which be $225 billion total.

The real growth in India’s cellphone industry came after the Indian government relaxed its rules. Since then, Reliance Infocomm entered the market. In 2002, Reliance Infocomm helped push the market by offering phones that were nearly free initially and did not require payment until later.

The Gartner report makes additional advisements for Indian telcos that include a key focus on non-voice value-added services such as games, ring tones, and music downloads. With a large portion of the market opportunity coming from low-income users, average revenue per unit (ARPU) may be as low as $5 per month in the next 18 to 24 months. These additional services will help to improve the bottom line and differentiate offerings.