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Teledata

Tele Data

Mobile Subscribers Yearwise comparision

Beyond Voice :Emerging opportunities and challenges in the non-voice services segment

August 09, 2017

Beyond Voice :Emerging opportunities and...

Arun Gupta, CEO and Founder, MoMagic Technologies

The Indian telecom services market is estimated to reach $103.9 billion by 2020, growing at a rate of 10.3 per cent annually between 2015 and 2020. The country is also emerging as the world’s second largest smartphone market, bracing towards having almost 1 billion unique mobile subscribers by 2020.

The urban internet user base grew year on year by 7 per cent to 263 million for the year ended October 2016 and is expected to touch 275-285 million soon. Meanwhile, the rural internet user base grew year on year by 22 per cent to 157 million for the year ended October 2016 and is forecast to reach 170-180 million soon.

Given the fact that more than 60 per cent (around 300 million) of the urban population is already using the internet, it is rural India that now holds the potential to trigger the next level of growth. According to the 2011 census, the country’s rural population stands at 906 million and the internet penetration is only around 15-20 per cent, thus leaving a huge population (around 700 million) untapped.

With the consistent rise in mobile penetration along with increasing network coverage, affordable handset prices (with an entry-level 4G smartphone now available for as low as Rs 2,999) and a consistent decline in data costs, the emergence of a digitally connected rural India is very much a reality today. The growth in rural telecom has brought in a huge set of opportunities along with challenges for the telecom sector.

In rural areas, 92 per cent of the users consider the mobile as the primary device for accessing the internet, largely driven by the availability and affordability of smartphones, and the accessibility to infotainment and social media platforms. Mobile penetration has already hit the 100 per cent mark and there is now a steady rise in demand for non-voice services. Telecom operators have made huge investment commitments to the tune of Rs 670 billion towards the acquisition of 3G spectrum, and significant investments have been made for setting up the network infrastructure for 4G as well. It is the mobile internet services market or the non-voice services market that will enhance operators’ average revenue per user in the next few years.

Over the next few years, the share of non-voice revenues in operators’ total revenues is expected to increase from 10 per cent to 20 per cent. The global average is approximately 23 per cent. Here, it is also important to highlight the fact that the data prices offered in India are amongst the lowest in the world.

Infotainment, has so far been a key driver of the rise in mobile and internet penetration in rural areas. Utility-focused non-voice services such as information alert/ news applications, m-education, m-health, m-banking, m-governance, m-agriculture, m-wallet, messaging and social platforms have seen huge traction in rural areas.

Non-voice services promise a huge revenue potential for telecom players and operators at one end and a better standard of living in rural areas at the other. However, a conducive policy framework and supporting infrastructure are needed for the proliferation of non-voice services. The introduction of innovative and well-meaning localised non-voice services with a robust network infrastructure requires investment and a long gestation period, and this makes it very important to understand that the industry cannot invest in infrastructure, on the one hand and, on the other, be asked to provide services absolutely free or at completely non-competitive price points. Second, due recognition to content creators has to be given and there has to be a collaborative effort by content providers, operators and the government to help evolve a recognised, rewarding, sustainable and buoyant non-voice services ecosystem for rural areas. Third, it is important to build a cohesive, transparent and high equilibrium ecosystem, which is extremely secure, for non-voice services. This is imperative because, in the past, the inequitable revenue share for non-voice service providers and lack of transparency around billing/usage data has had an adverse impact, especially on security issues and innovation.

As stated earlier, since mobile internet service demands high investment and has a long gestation period, there is a need for synchronisation of strategies at the policy level and collaboration among operators, content providers and the government. This is challenging, but important in order to capitalise on the mobile and internet revolution being witnessed in India.

 
 

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