Ronnie05's Blog

Powering the next wave of revenue growth in Indian telecom

Posted in Industry updates by Manas Ganguly on May 5, 2013

As per latest stats from Gartner, India’s mobile services market is expected to grow eight per cent to Rs 1.2 trillion in 2013 but will account for only two per cent of the worldwide mobile services revenue as operators are struggling to increase profit margins. The revenues from mobile services stood at Rs. 1.1 trillion in 2012. According to Gartner, mobile connections in India are expected to grow to 770 million in 2013, up 11 per cent from 712 million connections in 2012. In current circumstances, the Indian telecom market will account for 12 percent of worldwide mobile connections, but just 2 percent of worldwide mobile services revenue (in constant USD) in 2013

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Some of the factors are which are hurting the Indian Telcos significantly
• The Mobile ARPU hasn’t shown any pace in growth over some time now even though the drop has been arrested by the operators. Thus operators are not adding incremental revenues. The ARPU of GSM mobile operators have declined by up to 24% during the period between 2008 and 2011
• Over the top service providers such as Facebook and WhatsApp are eating into the SMS cash cow.
• The legislative and regulatory uncertainties over taxes and other payments and agreements are bleeding the operators.
• With the Metros and Tier 1 cities hyper connected, the next wave of growth would be the rural hinterlands – However, further rural expansion of mobile services will come at a cost.

Indian Telcos are looking at mobile broadband services to be the next wave of revenue growth. Coupled with innovative solutions and services, associations which cut through different other eco-systems (media transmission) and local mobile apps which is key to break thru the multi-lingual geographies – Telcos are putting in place, strategies for addressing the data revolution. While India plays catch up with the rest of the world in terms of mobile broadband adoption, telecom operators need to think of growing the top line through innovative services. A report on Indian telecom authored by AT Kearney, states that non-voice revenues of mobile operators will increase to 27 per cent by 2015 from 14 per cent in 2011, of which about 15-20 per cent will come from mobile data, which is expected to grow at 126 per cent. The voice revenues will decrease to 73 per cent from 86 per cent during the same period. Proliferation of smart devices is accelerating this shift towards data. In 2008, only 3.8 per cent of handsets sold in India were smart phones. By 2011, this had increased to 8.1 per cent and is further expected to grow to 25 per cent by 2016

Relevant Applications for various segments are being put forth and with the launch of 4G and increasing reach of 3G services, the data revolution is about to roll in. Innovation in utility apps that help bring efficiencies in a consumer’s life will bring in sustained revenue and will be relatively more difficult to replicate by new entrants. While social and video apps are doing extremely well in India, it is time to look beyond these and deliver apps that can have a sustained business model. India has a phenomenal pent up demand for mobile broadband and local mobile apps that solve everyday problems for consumers.

Rise of India’s Digital Consumer (Part I)

Posted in e-commerce by Manas Ganguly on August 27, 2012

One of my earlier post deals with the e-commerce industry in India at this point of time. This series of posts will examine  the rise of India’s digital consumer.    

There are 124 million Internet users in India today, a growth of 41% Y-o-Y, out of which, 20 million users are through smartphones and tablet computers. Acccording to eBay, this number is expected to grow  100% over the next one year with the number of such devices growing everyday. comScore also reports India to be the fastest growing online market amongst the BRIC countries and India’s explosive online growth story will continue because, most online categories in India currently show below average penetration compared to global averages. With 124 million internet users, India is at a 10% level internet penetration. In correspondence to the rapid growth of Internet in India, Forrester estimates eCommerce revenue in India to increase from $1.6 billion in 2012 to $8.8 billion by 2016 accelerated by the increasing penetration of internet on mobile and social media.

Now heres the dope- for a country which is supposed to be technology phobic or plainly donot have access to technology because of the economics, Over 94% of the evolved internet shoppers surf internet, 87%  of the users compare product prices online and 68% of them have made online purchase using their smartphones and mobile devices.

As Internet penetration and the smartphones and tablets price accessibility increases – this will lead to increase in mobile commerce (mCommerce) volumes in India. Online purchasing through
mobile phones is catching up fast in non-urban and rural areas and the ratio between rural and urban buyers would be 1:10 right now but it may go up to 6:10 over next two years. Consumer Internet shopping habit is now forming quickly with most of these users using their mobiles as a window to transact ‘anytime and anywhere’.

To be continued.

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