New Delhi: This year will mark a breakthrough for fourth generation (4G) telecom services in India as nearly one-third of the mobile phone users in India will adopt 4G by December, according to a report on technology, media and telecom by global consulting firm Deloitte India.

The surge is expected mainly due to the increased roll-outs by telecom companies in the last one year and the growing demand for 4G-enabled handsets, the report said.

The report also predicts a growth spurt in the used smartphone market, which is expected to grow 32% annually till 2020, generating $4 billion, despite the value of the average second-hand smartphone falling to $85, from the current $91, driven by a more organised second-hand market.

India is currently the third largest smartphone market with estimated annual sales of about 143 million units in the 2014-15.

The country is expected to become the world’s second largest smartphone market by 2017, selling around 174 million units, behind China’s 505 million in 2017. “At least 10% of premium smartphones ($500 or higher) purchased will have three or more owners before being retired," the report said.

The increasing 4G uptake is also expected to impact the way people communicate. India will have as many as 50 million users of so-called Voice over LTE (VoLTE) services, using the long term evolution technology standard, by the end of 2016.

“In spectrum deficient markets like India, VoLTE is expected to increase capacity, allowing operators to move voice calls off 2G and 3G networks and onto 4G networks," the report added.

This could increase the number of users moving away from traditional voice call.

Instead users will substitute traditional voice calls with a combination of messaging, voice and video services delivered ‘over the top’.

“A decline in voice call traffic could also enable carriers to reduce the quantity of spectrum assigned to voice, and make this available for data," the report said adding that as many as 26% of mobile phone users in developed markets will not make a single voice call in any given week.

Another hardware segment that is expected to see significant growth is wearable devices, primarily driven by the younger generation in tier 1 and tier 2 cities of India. This segment is expected to help the country be a major part of the expected approximately 250 million units global sales by 2018, says the report. Maximum growth however is expected from North America and Europe.

Smart cities will need investments of as much as $150 billion over the next few years, Deloitte estimates. Of this, the private sector contribution is expected to be 80%.

“Several challenges remain with respect to the development of smart cities, including those related to project funding, project management, government decision making and policy and regulatory framework," the report said.