India’s mobile industry is set to consolidate in three years, forcing at least half of the industry’s 12 operators to sell or go out of business, according to Manoj Kohli, chief executive of Bharti Airtel, the country’s biggest wireless operator.

He also expected international telecoms companies to continue to expand into “the world’s most competitive market”, which has about a dozen players, despite the entry of three foreign groups in the last few months.

“The Indian market is so attractive. It is a party dream. I am sure a lot of large telcos are analysing the Indian market. They are looking at valuations. Some people may be interested; some people may think it’s too late,” said Mr Kohli.

India’s wireless market, the world’s second largest where only 27 per cent of the population owns a mobile phone, is also the fastest growing, adding about 10m subscribers every month. At the end of September, there were 315m subscribers in the country.

Last week, Japan’s NTT DoCoMo announced to pay $2.7bn for 26 per cent of Tata Teleservices. The deal comes after Norway’s Telenor and Etisalat of the United Arab Emirates made similar moves recently.

The companies will find themselves competing aggressively in the sector, which has among the world’s lowest tariffs and revenues per user. About half of the current players will disappear after three years, according to Mr Kohli.

“I believe the intensity [of competition] will continue for couple of years. After that some players may not be able to see profits then consolidation will start,” said Mr Kohli. “Globally, maybe four players are viable. India could be five. Beyond the fifth player, viability will be extremely tough.”

Despite the competition, Jon Fredrik Baksaas, Telenor’s chief executive, is optimistic that the company would be able to thrive. Telenor last month agreed to pay $1.07bn for a 60 per cent stake in Unitech Wireless, a fledging mobile operator.

He said the company’s experience in other greenfield investments in countries such as Pakistan, Bangladesh and Hungary over the last 15 years would allow it to grab about 8 per cent or more of the market in 8 to ten years.

“We have done greenfields,” said Mr Baksaas. “We have been able to grow market shares in very competitive environments.”

He also expected mobile operators in India to have more distributed market shares going forward because of limitations of frequencies.

“The existing players have a long headstart on the newcomers. But on the other hand, frequencies are limited and services will be affected in the longer run. Operators with available frequencies will find a room to operate,” said Mr Baksaas.

Mr Kohli, however, said Bharti would continue to grow despite the limitation. “Spectrum will not be a constraint to our growth in market share,” said Mr Kohli. ”We are committed and dedicated to growing our market share every quarter.”

“3G spectrum is also coming up. It will help. To that extent, we will continue to get more spectrum.”