Ronnie05's Blog

Indian Telecom Story (Part XXVII): The Future is Mobile Internet.Is India Ready?

Posted in Industry updates, Internet and Search, Value added services and applications by Manas Ganguly on March 4, 2010

The Mobile Revolution is dead, Long live the Internet revolution!

At the very outset, I need to correct myself: The Mobile Revolution is not dead by any means. India is just 525 million subscribers young and the estimate is 1 billion by 2014. However, the age of hyper competition has seen the net revenue realizations drop like a stone through the last few months. White Box Manufacturers from China have swamped the device arena and have redefined the principles “lower cost of acquisition” and “feature rich devices”. Micromax, a non entity till an year back has done close to a million devices in the January, 2010 calendar month. You still have to add Spice, Karbonn and others to the list. On a cumulative basis white box manufacturers a.k.a local players are clocking close to 1.5-2 million handsets in a month. That’s some number. However, the point I try making here is that India with its 525 million subscribers is suddenly not as attractive a telecom market for the next 500 million waiting to happen. ARPUs and realizations have reduced considerably for the incumbents and it is difficult to fathom how the new entrants want to make sustainable profits. Fortunately for Indian Telecom, 3G looks like a near future possibility and while most of the spectrum will still be used by voice services, there is some hope for data and VAS models.

The Google Bus which was an initiative by Google to introduce the Internet to the masses.

Internet and delivery: The Telecom Operator perspective.
The next big thing for Indian Telecom is likely to be Internet and Internet based VAS services. To put it in numbers, the number of Mobile subscribers in India is 525 million and the number of internet users is 47 million. The opportunity thus would be leveraging the existing 47 million users and the big opportunity is growing the 47 million onwards. Coupled with applications like Mobile ticketing, Mandi Rates, Weather services, Banking and payments, internet would change the way people think and work radically. The idea is not the top of the line innovative “bells and whistles” apps but apps which reflect daily chores and activities that people undertake. (Remember the “What an Idea Sirjee” ads?). Content aggregators, developers, Telecom Operators, handset manufacturers and the eco-system needs to bring solutions which help people fulfill their daily requirements in a better manner.

The interesting thought here is that Internet delivery may not be the way it is currently done.
• The Computer will definitely be replaced by the handheld
• Regionalization and Vernacularization of content will be the key to adoption

Device capability and building the eco-system: The Handset manufacturer’s perspective
So for handset makers in India, its time to abandon the cost game and play the value game. Nokia is already learning the ropes with its Life Tools and is trying to create an eco-system in the current for service demands of the future. However, a lot others are not quite there both in terms of intent and capability. The game will see a shift from “Call and SMS” handsets to “Call, SMS and more” handsets.

The capability building will include two things:
• Device capability: Evolve from “Talk and SMS” Device strategy to data capable handsets. Most of the handsets in the mid range are not even Java enabled and have inadequate RAMs. This may be OK for cost reduction in short term but the devices would be severely short in terms of generating a demand tomorrow.
• Building an Eco-System: Device manufacturers need to integrate their products with a development eco-system. It would mean giving away a lot of their channel power to the aggregator or developer but it is necessary to get into the shared mode of delivery rather than “do it all myself”.

The mobile internet revolution is waiting to happen. However the delivery and the content needs to be thought through.

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