Mobile Internet: Gaining mainstream acceptance in India

In a few earlier posts, i had lamented the lack of data traffic focus in TELCOs in India. Given the tariff war, hyper-competition and the near advent of 3G and the necessity to augment voice incomes, TELCOs in India are changing their focus very ostensibly from Voice to Data Traffic. Ad Mob’s mobile ad requests for India is a surrogate measure but then it carries home the point that internet on Mobile is here and here to stay for good.

Over the last 24 months, Internet requests from Mobiles have registered a 220% CAGR in India. The growth percentage is 3X i.e 660% on a four month basis in 2010. Over the last 2 quarters, Indian Telecom Operators have been trying to make a point with data services and the data tarriffs have now breached the Rs.100 per month mark, which is a critical pricing threshold for mass acceptance. With the coming of 3G and Broadband, this number will become self sustaining given the following factors:

1. The high quality content and delivery systems that 3G will provide will increase traffic volumes
2. Increased traffic volumes will bring in economies of scale reducing prices and making Internet more accessible to more people.
3. The strong eco-system that is beginning to take shape with Telcos, OEMs, ODMs, Developers and Consumers will further drive compelling content that will drive data traffic.

The internet and data habit is quickly becoming mainstream and the TELCOs and other VAS players are pleasantly surprised and are hoping for an extended run into this source of revenues.

The growth registered in the last 4 months in India was also forecasted study by Cisco released in February 2010 projected that India has the highest country mobile data traffic growth rate of any country, with a CAGR of 222% from 2009 to 2014. The study says that annual global mobile data traffic will reach 3.6 exabytes per month or an annual run rate of 40 exabytes by 2014. Such a figure equates to a 39-fold increase from 2009 to 2014, or a CAGR of 108%. If AdMob is to be believed, these numbers are happening already. The same survey also concludes that by 2014, more than 400 million of the world’s Internet users will access the network solely through a mobile connection.

The rapid consumer adoption of smart phones, netbooks, e-readers and Web-ready video cameras as well as machine-to-machine applications like eHealth monitoring and asset-tracking systems, is continuing to place unprecedented demands on mobile networks. In spite of the economic downturn, the demand for mobile services has remained high, posing both challenges and opportunities for service providers worldwide.

I shall be exploring the opportunities and challenges that the proliferation of Mobile Internet will be bringing to the Indian context in my next blog.

Associated content: The Indian Internet User
State of Internet in India