Spurred by the introduction of full mobility cellular services and competitive response from the GSM (global system for mobile communication) camp, the Indian cellular market is estimated to register a 96 per cent growth to reach 56 million connections by 2004-end.

The cellular market will overtake fixed phone lines in the third quarter of this year and cellular penetration will nearly double during the year, said IT and telecom research agency Gartner on Tuesday.

Cellular penetration in India, which stood at 2.7 per cent at the end of 2003, is expected to increase to about 5.2 per cent by 2004 end.

"Provisional forecasts suggest that cellular connections will reach 56 million by the end of 2004, representing 96 per cent growth compared to 2003," it said.

It said unparalleled growth in the CDMA cellular market is driving major changes through the Indian wireless industry, prompting unprecedented co-operation between handset vendors and carriers.

"These changes are expected to reshape the cellular industry landscape in India during 2004, with both GSM and CDMA operators reducing tariffs and bringing down barriers to entry," Kobita Desai, principal analyst (telecom), Gartner, said.

Samsung and LG enjoyed the early mover advantage, while in the latter part of 2003, Nokia and Motorola started to make their presence felt in the CDMA market, introducing a range of new devices and securing sizable supply agreement with operators.

Giving the vendor market share for Indian mobile handset market in third quarter of 2003, Gartner said that Nokia led the market with a share of 32.6 per cent, followed by Samsung with 29.6 per cent share and LG with 22.8 per cent share.

"Volatility in the Indian cellular market is expected to continue for at least the next 18 months as the main operating groups carve out their future market positions, while some players attempt to establish niche positions," it said.

Cellular penetration is still 'fairly low' in India at 2.7 per cent, but is expected to exceed 10 per cent by 2008.

"India lagged behind other developing markets as until now it had failed to find the right mix of regulatory and commercial drivers which would address chronic supply side constraints," Bertrand Bidaud, vice president, Gartner, said.

Gartner said that 2004 would be a year of new and missed opportunities for India's fixed network service providers.

It also gave a high probability of 0.8 that the government would support industry demands to increase the cap on foreign investment from existing 49 per cent to 74 per cent.

ILD, NLD markets in India still not competitive: Gartner

Global research firm Gartner on Tuesday said international and domestic long distance markets in India were still not competitive and prescribed removal of remaining regulatory restrictions to spur competition.

"Neither market (ILD or NLD) meets the criteria for full competition as long as consumers cannot choose their international and domestic long distance carrier. Carrier access codes need to be implemented, which will provide users the freedom to choose their preferred service provider," a Gartner survey said in New Delhi.

Prices have come down in the last two years, particularly for voice services, but they are still high compared with competitive markets and in terms of voice quality India still has a long way to go before it matches best practices in developed countries, Gartner said.

Evaluating telecom services companies on the criteria of choice of carriers, pricing and service quality, it said for full competition, the market needs to have at least three major players, world class service quality and very competitive pricing.

It said there was limited competition in both domestic long distance and international voice services.

"Competition exists in the international and national long distance services but choice is limited to access carriers, and not the end users thus muting the competitive environment," Gartner said.