Ronnie05's Blog

Internet in Indian context – The prime mover

Posted in Industry updates, Internet and Search by Manas Ganguly on January 11, 2013

If 2000-10 was the decade of voice, the current decade 2010-20 would be the decade of data. Over the next three years, data could more than double in size to a US$14 billion industry, contributing over half the incremental industry revenue and add 500 bp CAGR to an otherwise slowing voice industry. The economic payoff of a data-connected population would also be significant. A World Bank study shows every 10 percentage point increase in broadband penetration leads to a 1.38 percentage point increase in per-capita gross domestic product growth in developing economies.

With 121 million Internet connected consumers, India’s tally lags 565 million Chinese Internet users by more than some distance. However a 42% CAGR in Internet subscribers over a 3 year period from 2008-2011 provides ample reason to get excited about the Internet market’s potential for stellar growth in India. An industry study by Assocham and ComScore indicates that the Internet user base in India is approximately 125 million and among the BRIC nations, India has been the fastest growing market adding over 18 million Internet users and growing at an annual rate of 41 per cent.

India is one of the youngest online demographic globally with about 75 per cent of online audience between the age group of 15-34 years. Among the age segments, 15-24 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments. The female population accounts for almost 40% of 125 million internet users – indicating that gender equality on the information superhighway is catching up.

Internet Growth India

The Assocham-ComScore report on Internet usage in India (october 2012) indicates – The top five popular categories accessed online are social networking, portals, search, entertainment and news sites.

Online travel has seen growth across all subcategories including car rentals, online travel agents, airlines as well as hotels and travel information sites.1 out of 5 online users in India visit the Indian Railways site.

Others waiting to benefit include companies offering Indians everything from online travel bookings, recruitment and matrimonial portals. The country’s Internet retailing market will reach $2 billion by 2014, with consumer electronics, toys and games growing the fastest, forecasts by Euromonitor show. Retail category penetration has increased to 60 per cent reach and has grown to 37.5 million unique visitors a month. The travel segment sales will grow at a compound annual growth rate of nearly 38% in five years from 2009, and total $5.7 billion in 2014, according to Euromonitor. Apparel has been the fastest growing subcategory in retail and reaches 13.4 per cent online users in India.

These are still early days for Data and Internet in India and there are many business empires and business models which would scale up with the rise of the internet and Always on real time data access. The Internet and data industry in india may be 10 years – but the big numbers are starting to build up. Watch this space.

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Top 20 Mobile Operators in the World

Posted in Industry updates by Manas Ganguly on May 28, 2011

Wireless Intelligence released a report recently on the Top 20 Mobile Operators in the world based on revenues. The list is led by China Mobile followed by Vodafone and Verizon. Bharti Airtel scores 5th in terms of subscribers having just shy of 200 million subscribers.

However, Airtel is the worst performer in terms of revenue generated per user. Airtel earns USD 14.5 per subscriber in an year, equivalent to about Rs. 650 in an year.China Mobile earns over Rs. 1530 on its 584 Million Subscriber base. NTT DOCOMO which is primarily based in Japan, earns over 9000 rupees per subscriber and ranks 6th largest in terms of revenue on its relatively miniscule 57 million subscriber base. That is about 14 times more than Bharti Airtel !

7 out of top 20 mobile operators earn over Rs. 4500 (USD 100) per subscriber. The average per subscriber earning amongst top 20 mobile providers is Rs. 3813!

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Powering Inclusive Growth through ICT (Internet, Communication and Technology)

Posted in Technology impact on economy and population by Manas Ganguly on August 16, 2010

10% increase is Mobile penetration would lead to .6% increase in GDP of the nation: That speaks volumes of Telecom as a economic multiplier. In a nation as large as India, the power of Telecom to connect its 1.2 billion people with Information and utility services is seen as the next Mass movement to drive the a broad based fundamental growth.

The Government of India realizes the potential of Telecom and has been at different levels pushing the levers for stimulating Telecom/Broadband growth. In what is a spin-off of sorts, the Government of India in partnership with NABARD, Department of Telecommunications, Banking/Financial institutions and funded by the USOF (Universal Service Obligation Fund) is launching a spate of micro-programs that will aid Women in Rural areas (Aggregated to Self Help Groups) to become entrepreneurs and gain some socio-economic independence.

The project which is un-named yet, focuses on females, and uses NGOs and Micro-Finance companies to reach out to these Self help Groups (SHGs), helping them with micro-credit and loans to finance their ventures. Furthermore, GoI is also joining hands with market players under the aegis of Corporate Social Responsibility to support the SHGs in their entrepreneurial endeavor. So, the Nokias and Airtels of the world are a part of this whole exercise extending their support, help and expertise to the SHGs. The beauty here is that while this is under the aegis of CSR activity, it has economic and business relevance to these players as well.

The SHGs adorn the role of last mile distribution houses in an otherwise lengthy and economically unviable distribution supply chain. Thus the whole template of a win-win-win for all three parties in the program. The Government benefits from economic-inclusion of the bottom of the pyramid people. The SHGs would benefit from being able to have an earning for themselves at the end of the month. The Companies would benefit from benefits of getting connected to the last mile and the last consumer in the value chain.

That’s called reliving C K Prahlad’s Value at the bottom of the Pyramid.

Enter Google Voice

Posted in Industry updates, Value added services and applications by Manas Ganguly on March 18, 2009

googvoice

You can often find me saying in exasperation… “there’s Internet and there is Google!”. It appears that the Mountain View based giant is not satisfied with its Search Stardom and wants to protract the internet technologies to disrupt other industries around the world. Google Voice, though in its infancy has the power to blow away the existing rules of the Telecom game and i daresay, that carriers and operators throughout the world are hawk eyeing Google’s moves.  

First there was Google Latitude that made its debut in January 2009 and now is the turn of Google Voice. Both services combined together would serve as a full scale solution to networking, voice and data needs of people around. (Imagine yourself beaming a picture of a new dress that you would like to buy for your daughter to your wife for her approval. You are in New York and she in London or any other part of the world). That scenario with Google can give cold sweat to many other companies around who have stakes in Telecom, Voice, Data and auxilliary services.
Google, signaled what would be the next telecom technology disruption on 13th March 2009 (Read here). Within 5 days, there are half a million blog posts dedicated to Google Voice. Check them here. As i had said, in one of my earlier posts, the art of maintaining Relevance comes very naturally to Google.
Bought in 2007, Grandcentral is reincarnated as Google Voice in 2009, with a few polishes and additions. Essentially a VoIP based network, a user is given an account and a 10 digit phone number, except that there is no phone at the end of this number. Instead the user has to log onto his account and “manage” his calls. He has to specify where the calls need to go i.e either his mobile or his residence number or his voice mail etc. One can also program it such that business calls are routed to office number till 5 O clock and then go to voice mail system directly. So this becomes a single portal of managing all communicational priorities. It can also be managed for customizable features, call screening and controls and solution et all. That is the core of the technology! Out side this, there are features such as 
  • Automated voicemail transcriptions — Users have the option to receive free transcriptions of all their voicemail messages.  These transcriptions are fully automated (i.e. no human listens to the voicemail), and are searchable within your Google Voice inbox.
  • SMS messaging — Receive SMS text messages sent to your Google Voice phone number on your mobile device and on the web.  Send and reply to text messages directly from your phone or your Google Voice inbox.
  • Conference calling — If you’re on the phone and receive an incoming call, you now have the option to merge your calls.  Have as many as six people join a single call.
  • International calling — Place international calls at reasonable rates from your phone or by using the QuickCall button in your Google Voice inbox.  Purchase credit using Google Checkout and pay by-the-minute for international calls.
Read the complete feature lists here
Google Voice is available in its Private Beta option to users of the Grandcentral. With this now, Google is subverting the rules of the game by offering free speech to text messages, Free conferencing, almost free VoIP calls, Reduced International calling rates, and a link up with Gmail. All this is in effect, game changing!
There are the usual and relevant concerns with issues of privacy and the individual exposing himself to a ubiquitous company to such a large degree.The huge increase in personal content handled by one company that excels in mining such data paves a dangerous and rocky road to serious privacy issues.
Google is clearly sending another message to the rest of the telco’s and wanna be telco’s that Google is not happy with merely being the top of the pile in search and all things on the internet, but that it really plans to take over the communications world as well. Based on previous successes I wouldn’t put it past them!
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Indian telecom story: Collaboration as a tool to Profitability

Posted in Industry updates by Manas Ganguly on February 16, 2009

The recession has not been able to put the spanner through the growth engine of Indian telecom Subscribers. It is adding the 10 million month after month and the engine seems good to keep chugging on at a fair and brisk pace. The ARPU are south bound, which has a direct relation to profitability. However, competitors collaborating with one and the other have been able to keep the costs light. Wonderfully well, collaboration has reduced the CAPEX and OPEX of the operators giving them the healthy booster shots in their profits! I had reported sharing of the infrastructure / towers/ sites in some of my earlier posts as well. This has the single biggest tool in terms of reduction of the Capital expenditures! It was under the government intiation that infrastructure sharing started off. The win win logic, was higher reach (which the government was persuing) and lower CAPEX which the Telcos were persuing while adding the numbers. Both these objectives were thus fulfilled by Project MOST! Operators today have set annual targets of 50 – 60% incremental sharing! The traffic varies from being heavy in the day times to being sparse in the night times. An analysis of the traffic for geographies also enbales switching off the sites, without impacting service quality and on the other hand, making savings on the OPEX! While project MOST is based on existing infrastructure sharing, roll out of infrastructure in weak coverage areas and sensitive areas is also happening through collaboration. So instead of 2 or 3 different towers in a newly opened geography, operators are agreeing on one site shared by the others. Three simple steps and yet, when CAPEX accounts for 31% of your Revenue and your OPEX is $ 6 (per consumer), with ARPU of $6 per month (implying no margins), changes in these figures can significantly alter your bottomline.

An year end analysis of Revenue and Subscriber market share trends in Indian Telecom Bazaar

Posted in Industry updates by Manas Ganguly on February 11, 2009

The top 6 operators in the Indian Telecom space are thus stacked up in terms of Revenue market shares and subscriber market shares! It is not surprising to find Airtel at the tip of the heap both in subscriber and revenues. However, It is Vodafone that is almost par with Reliance in Subscribers and trounces it in the revenue market share by a whooping mile! In fact Reliance is so low in terms of revenue shares that the no 4 (BSNL/MTNL) and no 5 (Idea) are biting at its end! Tata Teleservices comes up last in the list!

1. Airtel seems to consolidate its national footprint quite handsomely with a 14% increase in revenue shares. It has the highest ratio of revenue to subscribers! Again indicating that Airtel seems to have built some stickiness with the high ARPU consumers. One would imagine so beacuse high ARPU consumers do a lot of travelling and Airtel gives them the seamless connectivity!

2. Idea has seen a 22% increase in its revenue share, with an increase in its circles coverage from 12 in 2007 to 15 in 2008. Drop in ARPU has not been compensated as much by subscriber addition, which is why the index stands low amongst all the GSM private entities!

3. Vodafone traditionally is one of the higher ARPU players! However, its launch in C Circles seems to have taken some of the sheen away from its revenue/ subscriber index i.e most of the acquisition that has happened in thesecircles has been low ARPU consumers.

4. BSNL + MTNL have seen erosions both in revenue share as well as in ARPU! Also it has lagged the growth rate of the telecom market in 2008! No wonder then that, they are rushing into 3G to boost their ARPUs/Revenues!

5. Reliance and Idea, the CDMA operators have had a bad year! more people are choosing GSM services over CDMA. There appears to be a churn from CDMA to GSM as well. There is a erosion in higher end consumers who probably are flocking to GSM players as more and more are opening up to all circles! Indian CDMA operators have consistently seen a decline in Revenue Market share from 21.6% in Q3 FY08 to 17.9% in Q3 FY09. While GSM operators managed to gain the loss of CDMA operators and now control a whopping 82.1% of the Indian wireless space. Will the trend change with Sistema’s entry into the space ? Or something needs to be changed in the CDMA ecosystem to make it fit in the context of the second largest wireless market in the world ?untitled1

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