India to be No. 2 mobile broadband market in 2016

India will become the world’s second largest mobile broadband market within next four years with 367 million mobile broadband connections, the GSMA predicts.

This will make it a larger market than US, which will have 337 million mobile broadband connections by 2016. Yet it will still be second to China, which will have reached 639 million mobile broadband connections in the same period, the industry association said in a statement.

Mobile broadband has grown exponentially in India since the 3G licenses were awarded in September 2010, with more than 10 million HSPA connections across the country. That number is expected to grow by 900% to 100 million connections in 2014. This will make India the world’s largest HSPA market within two years, surpassing China, Japan and US.

“India is taking great strides towards the uptake of data and already has the third largest internet subscriber base in the world with more than 100 million users, and the second largest Facebook subscriber base in the world with 43 million users,” said Sanjay Kapoor, CEO of India & South Asia, Bharti Airtel. “Along with 2G and 3G, when 4G is deployed, India will be at the forefront of cutting-edge mobile broadband provision globally.”

According to a recent study by the GSMA’s Wireless Intelligence service, mobile growth in India is being largely driven by more affluent communities in cities. Net additions in urban areas reached 85 million last year compared to 57 million in rural areas, with mobile penetration increasing by 20 percentage points in urban areas to 161%, against a 6.5 percentage point rise in rural areas to 36.6%.

The study shows that the provision of mobile broadband in rural and remote areas will help India bridge the so-called “digital divide”.

According to Wireless Intelligence, a 10% increase in mobile broadband penetration could contribute as much as $80 billion of revenue across the country’s transport, healthcare and education sectors by 2015.

At an average retail price of $500, the cost of an LTE smartphone is four times the average monthly GDP per capita in India, while the average retail price of a LTE USB dongle ($200) is twice an Indian’s monthly income on average, says the Wireless Intelligence report.