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2009 India Mobility Trends

December 16th, 2008 · 148 Comments

Mint asked me for ten key trends in the Indian mobile space for 2009. Given that I like these year-end lookahead exercises, I sent them the brief list they wanted, and also elaborated on each of them.

2008 was an exciting year in the Indian mobile space. The user base has grown by about 100 million, many new operators have got licences to launch operations, and the 3G auction is just around the corner. So, what does 2009 have in store for us?

Here is a brief summary of my pick of the ten trends that will define the mobile space in India in 2009:

  1. Subscriber growth in India will continue, driven by rural expansion, entry of newer operators, 3G and cheaper handsets.
  2. Incumbent operators will face challenges (and opportunities) on four fronts: new operators, mobile number portability, 3G and MVNOs.
  3. Focus on Value-added Services and Data will increase in saturated, urban markets.
  4. Mobile VAS operators which build direct-to-consumer relationships will start emerging.
  5. Flat-rate Data Plans will accelerate the use of the Mobile Internet, Social Media and Rich Media.
  6. Operators and/or handset players will launch AppStores to drive usage, innovation and revenues.
  7. Mobile Payments and Commerce will come into vogue for microtransactions.
  8. Companies will create multi-faceted mobile presence to deepen customer relationships and drive permission-based interaction and engagement.
  9. The Mobile will emerge as the next advertising and marketing medium – and be seen as capable of not just mass reach but also allow a high degree of targeting.
  10. The 2009 general elections will be an inflection point in the usage of mobiles in many different ways.

1. Subscriber Growth Continues: India is now growing at about 10 million new mobile users every month, and that pace of growth will continue. We will probably be close to 450 million subscribers by end of 2009. Four factors will drive growth of the mobile subscriber base: footprint expansion by existing operators especially in rural India, launch of operations by newer operators, issuing of 3G licences which will open up a new world of data services, and cheaper handsets which will even further lower entry barriers.

2. Incumbent Operators will face Multiple Challenges: The Indian market going ahead can be thought of us two markets: the Red Market which is the competition-filled, saturated urban battlegrounds (top 40-odd cities in India) and accounts for about 100-150 million subscribers, and the Blue Market covering the rest of India, with a potential size of upto a billion subscribers, of whom only 15-20% have actually got a mobile phone. The Red Market wants Data and Value-Added Services (VAS), while the Blue Market needs Access (Voice). A new landscape is emerging in India driven by four simultaneous disruptions — new operators entering the fray, mobile number portability rollout, 3G services, and the green signal for MVNOs (Mobile Virtual Network Operators).

3. Operators will focus on VAS and Data Services in the Red Market: Voice, SMS and quality of network can no longer be used for differentiation – they are now hygiene. The Red Market subscribers got a phone in the first decade of India’s wireless rollout between 1995-2005. They have been using Voice and P2P SMS for between 3 and 13 years. They now want to do much more with their phone – and their time is now coming. 3G will be a big enabler for richer services, and can actually drive higher ARPUs (Average Revenue Per User). We will also see the emergence of Data MVNOs – or mobile computing operators.

4. The Coming Era of VAS Operators: Today, 90% of operators revenues comes from Voice and Rentals. Of the balance 10%, about half comes from Person-to-Person (P2P) SMS. So, VAS accounts for only about 5% of revenue. Operators have primarily focused on voice. I see a new breed of companies emerging who will create direct-to-consumer services and focus exclusively on VAS – think of them as VAS Operators. They will have multiple revenue streams – not just from subscribers, but also from advertisers and businesses. They will be the Genies that make the mobile as magic lamps in the hands of consumers.

5. Flat-rate Data Plans will drive the use of Mobile Internet, Social Media and Rich Media: The US leads the way here. From being a laggard in the use of mobile data, the US is now showing the way with all operators having flat-rate data plans. In India, the right price point, according to me, is Rs 100 per month. A plan like this will encourage the use of the mobile Internet and other services, and create the necessary pull for companies to start building out mobile data services. Operators will benefit from large-scale adoption of data plans. The mobile is ideally positioned to be a window into the incremental N3 (Now-New-Near) Web). Mobile social networks will extend the communication and interaction capabilities of the device. From mail to music, from digisodes to streaming TV channels, the combination of smartphones, flat-rate data plans and 3G will be the gateway to a wide array of rich media.

6. Expect the launch of AppStores: Given the huge success of Apple’s store for mobile applications and Google following suit with its Android Market, I expect Indian operators and handset players to also create AppStores. These stores will open up the content and applications market to just about anyone, and drive both usage and innovation, and also create newer revenue streams for themselves. This will be the first steps in the opening up of operator walled gardens.

7. Mobile Payments and Commerce will come into vogue: This will happen via three mechanisms. First, the mobile cash balance with an operators could be used for payments. Second, a credit card or debit card could be linked with a mobile phone or number, enabling only an instruction to be issued for making payments. Finally, independent companies could encourage the creation of cash balances to be used for off-deck services. Taken together, the mobile has the potential to emerge at the centre of micropayments.

8. Companies will start creating their Mobile Presence: A mobile presence is much more than setting up a Keyword on a shortcode for lead-generation. Early Adopters will start integrating the mobile (especially SMS and the mobile Internet) into each of their business processes. They will use permission-based channels (rather than spam) to build deeper customer relationships and drive greater engagement.

9. Emergence of Mobile as a Mass and Targeted Medium: Today, the Mobile is one of four new media that ad agencies and business look at along with FM, Out-of-home and the Internet. Given the user base that is already there, the mobile is ready for breaking out of the pack. It has the attributes of a mass medium like TV and print, and can combine the targeting that the Internet offers.

10. The 2009 Elections will be an inflection point for Mobile usage: More than half of the voting Indian population will have a mobile – which is a two-way interactive device. As the Mumbai attacks showed, while TV can rouse passion, it is the mobile which gets people organised and working towards common goals. Just as the US elections of 2008 were a defining moment in the use of Internet and mobile, I believe that the 2009 general elections in India will drive innovation in how the mobile is used for building communities, citizen journalism, advertising and more.

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148 responses so far ↓

  • 1 Maribel Lopez // Dec 16, 2008 at 7:58 am

    Great posts. I noticed that your comments on VAS are all consumer related. There are obvious reasons for this but I was wondering if you see a growing market for line of business apps like CRM, logistics etc on mobile handsets in India?

  • 2 Idris Baxamusa // Dec 17, 2008 at 2:33 am

    5. Flat-rate Data Plans will accelerate the use of the Mobile Internet, Social Media and Rich Media.
    –> Flat AFFORDABLE data plans for middle class can definitely accelerate the growth but the operators should take care of the bandwidth it pathetic to say the least right now….

    9. The Mobile will emerge as the next advertising and marketing medium – and be seen as capable of not just mass reach but also allow a high degree of targeting.

    –> I remember you discussing on this topic on one of the mobile monday talks and I have been waiting to see how this sector emerges but it seems to take a while now.

    10. The 2009 general elections will be an inflection point in the usage of mobiles in many different ways.

    –> An Obama like campaign by our own politicos???? I was a subscriber of your free SMS services for news,markets, circket, etc and am wondering how the BJP’s and Congress would use this platform!!
    but when will an Obama or for that matter a Ratan Tata(as suggested by u in yr earlier blog)
    be a candidate for the most esteemed post of our country and growth,security,real education,infrastructure,health care,etc be the part of their campaigns rather then just empty words, caste,religion, regionalism (thats the only thing happening to our country right now)…….

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    […] Read more for mobile trends 2009 as predicted by Rajesh Jain, founder of MyToday. […]

  • 6 Saurabh Pandey // Dec 22, 2008 at 6:33 am

    Hi Rajesh,

    I concur with your thoughts. Mobility is the next trigger of growth in 2009. Mobile will drive content, advertising, distribution and monetization opportunities in 2009. I have also reflected on a larger and broader digital trends to observe in 2009 @ http://www.atomthought.com

  • 7 Roz McCarthy // Dec 22, 2008 at 2:39 pm

    Your latest predictions for 2009 are very similar to the growth predictions for the US 2 years ago…Any differentiating factors you care to discuss?

  • 8 Lokesh Kumar // Jan 2, 2009 at 4:39 am

    I agree with your thinking on the mobility trends. However, all of these are very generic. I am interested in hearing about specific sectors e.g. –
    1. How would mobile penetration impact education, specifically middle and high school?
    2. How would health sector benefit from mobile revolution?
    Are you seeing any innovative uses in these sectors yet?

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    […] Nimbuzz registered growth of over 45% in daily active user number consecutively for last two quarters from India. Nimbuzz is experiencing what studies have predicted. Successful entrepreneur, Rajesh Jain noted, in his widely followed blog, that 2009 would be the defining year for Mobile internet in the country. Read more in his blog post on India Mobile market predictions for 2009. […]

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  • 12 Naveen // Jan 27, 2009 at 6:25 am

    Hi Rajesh,

    I am doing a paper for my MBA marketing class and am trying to find India mobile handset market share data for 2008 split by cdma/gsm if possible. Any ideas where i can get this information from?

    Cheers
    Naveen

  • 13 santhosam // Feb 10, 2009 at 11:34 am

    its very helpful for us… the above points and trends and the information to how to develop and what it is the mobility trend i learn.. thank to them…

  • 14 India 2009: Viral Growth Market for Mobile Voice & Data Subscribers | IM-Mobile // Feb 12, 2009 at 8:02 am

    […] If you’re seeking a growth market for mobile voice and data subscribers, look to India where carriers acquire ten million new subscribers a month, according to blogger Rajesh Jain. […]

  • 15 Karan Goel // Mar 7, 2009 at 11:13 am

    Dear Sir,
    Kindly let us know the data for cell phone towers in india presently.

  • 16 Yogesh Patel // Mar 18, 2009 at 6:24 pm

    Dear Rajesh,
    The artical is really crux of Indian Mobility scenario pls abrest me every time on such right up’s.

  • 17 Rajiv Kumar // Apr 22, 2009 at 6:56 pm

    At RockeTalk, a set of mobile social media platform, we already notice the growth of users from the smaller cities and towns. These people are experiencing social media for the very first time on their mobile phone.

  • 18 Lalit Gaur // Jul 21, 2009 at 3:58 pm

    Yes I agree with you but only Q is , in India market growth rates will be double or more then double in 2010.

  • 19 Shalandra // Jul 25, 2009 at 2:55 pm

    Hi there, I am doing some research for South African Indians and I am keen to know whether you have any research on what types of services that the Urban indian are interested in. What services appeal to them etc. It seems there was a presentation done by Bharati Exhibitions but i cant get that info. Can you please help.
    Shalandra

  • 20 Bipin // Aug 15, 2009 at 11:25 pm

    Hi Rajesh,

    We are a new player in a space hitherto dominated by telecom players. We are trying to change the way 90% Indians top up their mobile. Please do review our offering http://www.mobikwik.com and let us know what you think.

    Cheers
    Bipin

  • 21 Global Voices Online » India: ICT for senior citizens-Where are we today? // Oct 4, 2009 at 5:08 pm

    […] limiting factors, the mobile telephony market is much more broad-based. According to Rajesh Jain of Emergic, India is now growing at about 10 million new mobile users every month, and that pace of growth […]

  • 22 India: ICT for senior citizens-Where are we today? :: Elites TV // Oct 4, 2009 at 5:11 pm

    […] limiting factors, the mobile telephony market is much more broad-based. According to Rajesh Jain of Emergic, India is now growing at about 10 million new mobile users every month, and that pace of growth […]

  • 23 Vijay Desai // Oct 8, 2009 at 6:24 am

    Hi Rajesh:

    Best way to connect to explore your views on Free to air TV on Mobile phone in india.

    Pls let me know.

    Thxs a lot,
    Vijay Desai

  • 24 Yogesh // Dec 11, 2009 at 12:51 pm

    hey Rajesh, Nice post……… it covers almost alp concern and the next drivers of mobile media industry. certainly 3G will be the next big thing……..which will increase the ussage of WAP sites in a coming years…..

  • 25 Blog Past: 2009 Mobility Trends // Dec 26, 2009 at 6:58 pm

    […] Communications (Apr 09) – TRAI MVAS Paper Comments (Jan 09) – Mobile Microcontent (Jan 09) – 2009 India Mobility Trends (Dec 08) – Growing Mobile Data and VAS in India (Dec 08) – India’s Red and Blue Mobile Markets […]

  • 26 abhi // Jan 20, 2010 at 10:02 am

    Good observations made by Rajesh Jain.
    appreciate your views on the use of mobile phones and other mobile products like tablet PC for the business.

  • 27 EVVJSK // Jan 28, 2010 at 12:40 am

    Any numbers by Handset Manufacturer and percentage of that 19 Million (i.e. Nokia, LG, etc…) ?

  • 28 SATISH CHAWANE // Feb 2, 2010 at 10:33 pm

    HY RAJESH
    I AM REALLY IMPRESS YOUR BLOG BUT YOU ARE NOT DISCUSSING IN MOBILE MANUFACTURING SEGMENT. AT THAT TIME THIS IS REALLY BOOMING SEGMENT FOR US.

  • 29 satish // Nov 26, 2010 at 5:20 pm

    mobile handset market share data by cdma/gsm if possible. Any ideas where i can get this information from?

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