I wrote this a couple years ago, but it is only now starting to happen!
The Indian mobile industry is about to face four key disruptions in 2009:
- New Operators will launch services
- Mobile Number Portability will get rolled out in phases across circles
- 3G licences will be given out and first services will commence
- MVNOs will be allowed
Put it all together, and a new landscape starts to emerge. Even though the incumbent operators are very powerful, these disruptions will be unsettling to all of them.
I look at India’s 325 million user base (and going to 600 million in 3 years) not as a single market, but as comprising two — a Red Market, and a Blue Market. The Red Market is the competition-filled urban battlegrounds (top 40-odd cities in India), which would account for about 100-150 million subscribers. The Blue Market is the rest of India — a potential market of upto a billion subscribers, of whom only 15-20% have actually got a mobile phone.
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. The Blue Market subscribers need a phone because that’s their only form of connectivity to the outside world — it is Voice Access that matters more to them than anything else.
Incumbent Operators in India are now focused on the Blue Market – and are not doing much about the Red Market. Their belief is that the Red Market has been conquered, and all future growth is only going to come in the Blue Market. This is where they are wrong.
The four disruptions that we just outlined are Game-Changers. The action (and value) going ahead in India will be not in Voice but Data and VAS (Value-Added Services) in India’s most valuable Red Market.