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TECH TALK: India Rising: Mobiles for All

January 19th, 2006 · No Comments

India ended 2005 with 75 million mobile users. December saw 4 million new additions. If that pace continues (and probably accelerate), India will see its mobile user base reach 200 million by 2007-end. Mobiles are there with almost everyone now. With the flurry of new offers, there is little excuse for not getting a mobile. And with the proliferation of mobiles, a new future becomes possible.

First, a status update on the mobile industry in India (via Mobile Pundit).

The Hindu wrote:

The subscriber base continues to grow aggressively and in end-2005 touched 75 million (48 million in end-2004).

Indian ARPUs are among the lowest in the world at around $9, the lowest being the Philippines at $7.2. To put things in context, average ARPUs are $40 in Australia, $42 in Korea and $10 in China.

Increased network coverage will result in higher month-on-month additions, scaling up India’s mobile connection base. It is expected that revenues will grow but unit contribution will drop and operators will be under pressure to reflect profitability. Telecom operators will struggle to find a balance between yield (income, earnings and margins) and growth to fulfill these expectations.

Voice revenues account for around 85 per cent of traffic while data and value-added services constitute the rest. Henceforth, the proportion will keep increasing in favour of data and value-added services, T. V. Ramachandran, Director General, COAI told The Hindu.

Currently, pre-paid users account for 77-78 per cent of users. By end-2009, this share is likely to go up to around 88 per cent. What may change during this period is the value of recharge coupons.

The mother of all telecom equipment tenders is being unveiled by BSNL. At $4.5 billion for 60 million lines, it is one of the largest of its kind in the world.

The dramatic change in the past month or so has been the introduction of the lifetime pre-paid plan. For less than a thousand rupees one-time payment, a user can get a pre-paid account with free incoming calls for life without having to recharge the account. This essentially means that any person willing to invest about Rs 2,500 (Rs 1,000 for the account and Rs 1,500 for a second-hand phone) can now receive calls for free forever. This will now open up a whole new segment of users especially in the blue-collar and rural segment.

Another aspect of the mobile growth in India is that the existing infrastructure supports data services (on both the GSM and CDMA networks). Given Indias pathetic broadband infrastructure and low PC penetration, it is possible that the mobile can become the way the benefits of the Internet are made available to the masses in India. This is similar to what happened in Japan in 1999 when NTT Docomo launched its i-mode service.

So, the mobile revolution is well underway. People are getting connected like never before. Those days in the not-so-distant past when one had to wait for months for a landline connection seems like a nightmare from a different world! Now, armed with mobiles, people are interacting with TV shows to decide who stays and who goes. This interactivity would have been hard to imagine a few years ago. The mobile has, indeed, become the cornerstone of our digital lives.

Tomorrow: Flying Free


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