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TECH TALK: Indias Digital Infrastructure: Mobile Data Services

May 25th, 2007 · 1 Comment

Indian mobile operators need to think of themselves as running two businesses. One targeted at top and middle India, and the other at bottom of the pyramid India. While the latter has huge growth potential (an untapped market of 250-300 million Indians in the next 3 years), the former is stagnant, addressing a saturated market with flat ARPUs and little growth.

All of the mobile operators strengths are in building out the user base in India. They have done this very well in the past few years and continue to do so. They also have plenty of work left in this regard hundreds of millions of Indians left out of the telecom revolution are finally going to get connected. Creating the infrastructure to get these millions on the network is a huge challenge.

In doing so, they need to rethink their role for the existing user base. This user base has been mobile for a few years now and are hungry for new services. India has a world-class wireless data infrastructure but it is barely talked about. By closing their walled gardens, the mobile operators are making a big mistake. This user base can pay a lot more after all, there were many who paid Rs 8-16 per minute for phone calls (as against Rs 1-2 today). They have money to spend. But the services available to them are limited even though for many, the mobile is the primary or even the only interactive device in their lives.

Mobile operators need to do two things to make the mobile Internet a reality in India for the first user base. First, they need to open up their data networks so consumers can go to any website they desire. Second, they should encourage the creation of a cornucopia of services by creating a business model which has more favorable revenue share terms for the service providers. Mobile operators can still make a lot of money and I would argue, that this will be a magnitude higher than what they do today by billing consumers for data traffic on open access. In other words, instead of thinking of themselves as media and worrying that they will just become bitpipes, mobile operators need to think of themselves as services pipes. If they do this, consumers will see them as the genie that made the mobile into a magic lamp.

There is a lot at stake for India. The Internet is core and necessary digital infrastructure if we are to continue to develop. Home computers and mobiles are the two necessary devices which will become the windows to the world of services. Even though we are not there yet, forward-thinking organisations and entrepreneurs can take us there.


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