A Micropayments Infrastructure for India: Part 4

Indian consumers spend about Rs 100,000 crore ($22 billion) on mobile services – 50 crore subscribers with an ARPU of just under Rs 200. The number of postpaid users is less than 10%, though their value will be more.  There is a lot of ‘cash balance’ flowing through the mobile ecosystem.

For operators, one issue could be that people may start using their ‘airtime money’ (which is very high margin for them) for alternate transactions (which would be low margin). I don’t think there will be a shift – there is no replacement for talking and texting. In fact, I expect that people will now probably have more money with the operators since there is much more that they can do, enabling operators to sell higher-priced VAS!

The real opportunity will be for thousands of developers and service providers who can now create paid services for the mass market with a capability to target hundreds of millions of Indian mobile users – and get 90-95% of what the end users pay. This will spawn a whole new industry in India, and make the mobile that much more valuable.

Apple did much the same with the iPhone. Its existing iTunes accounts with credit cards helped it jumpstart the Mobile  App Store. Today, there are over 100,000 apps. India needs something on a similar scale to drive innovation at a mass scale.

Tomorrow: Part 5