Industry in 2011
The wireless industry in India has shown unparalleled growth. This paper is an effort to present
an insight into the future of the highly dynamic market. It takes into account the key drivers of
mobility, such as ARPU, MoU, VAS, Data Cards, future trends in wireless internet, enterprise
market and Convergence.
ARPU and MoU With increasing number of subscribers,
operators have to maintain QoS in order to
Per second billing, increasing popularity of retain customers and fight the churn which
dual SIM handsets and higher penetration in is expected up to 8-10% after the launch of
C circles are the major contributors to the MNP, from 5-6%. Also decreasing AMPU
continuously declining APRU and MoU. It is (average margin per user) has led to
estimated that the blended ARPU for GSM increased focus on the revenue assurance
and CDMA is expected to decline to `98 practices.
and `60 respectively,
Wireless subscribers capable of accessing
internet via mobile will grow from 149.03 mn
in Dec’09 to 187 mn in Dec‘10 .With private
operators rolling out 3G soon, the number of
active wireless internet subscribers is
expected to grow exponentially. The main
driver will be the ability to get real-time
while MoU for GSM and CDMA will fall to information on the move.
320 and 260 minutes respectively by Dec
The effect of declining ARPU and MoU can
be directly seen in operators’ revenue. The need for all-time connectivity, increased
Operators are trying to increase subscriber growth in sales of laptops, growing
base so that once their 3G services are businesses across various segments, ease
launched, they can migrate the high end of use with plug and play, internet access
customers to 3G, thereby currently even in the far-flung areas, download speed
sustaining loss but expecting future growth (maximum 3.1Mbps) and flexible monthly
in revenues. rental plans (from `49 to `2500) are the
major driving factors for the data card
market. This segment is estimated to be services and to generate revenue and arrest
worth `740 Cr in FY 2009-10. Most telecom falling ARPUs.
operators have entered this market as they
are focusing more on data. 3G will further The latest trend among operators and
drive this market and give GSM players a Handset vendors is to have their own
competitive edge over CDMA players. Sales mobile application stores, owing to their
of data cards is expected to grow from 11 popularity and revenue earning potential.
mn in ‘09-’10 to 20 mn by the end of 2011. These app stores not only provide a secure
single point for customer to get all the latest
MVAS mobile applications but also an opportunity
for the operators, 3rd party application
The 3G scenario in the future will be data providers, aggregators and mobile handset
driven and with cheapest call rates in the vendors to coexist. The success of any App
world, Indian operators will be focusing store would depend on the Application
more on non-voice services as their main portfolio, developer community and the
source of revenue. The MVAS revenue for customer awareness.
FY’09-10 was `97.6 billion. MVAS currently
contributes to 10% of operator’s revenue 3G will give an additional boost to the
and is expected to reach `122 billion by the mobile gaming industry, with interactive
end of 2010 and 158.6 billion by the end of games, multi player gaming and mobile
2011 thereby contributing to 20 % of gaming contests being introduced. Revenue
operator’s revenue. from mobile gaming is expected to reach
$250 million by the end of 2010.
Mobile advertising is another source of
revenue for the operator. At present, it is
approximately $25 million and is expected
to grow to $56.6 million in 2011.
Advertising, which is majorly SMS and IVRS
based, will see a shift towards video in the
The major drivers for growth in MVAS will coming years. Mobile advertisement and
be the increasing demand for mobile data content customization to a certain target
connectivity, entertainment, personalized region, demography and behavioral data is
content, mobile social networking, also being looked at as a source of revenue
enhanced devices and low cost feature rich in both rural and urban areas. The diversity
handsets. in languages and dialects in India creates a
large potential market for regional content.
Entertainment, especially music and cricket, AdRBT will be a major contributor in MVAS
has always been highly popular in the revenue in the coming years.
Indian VAS market and will continue to do
so. However, operators will have to look at Operators are also focusing more on Rural
other options like interactive Gaming, LBS, VAS, which is available in atleast 10
m-commerce, in order to differentiate their languages, providing ‘mandi bhav’ (market
rates), health & weather info and services
like regional CRBT. These services are
available at `15 per month, while the VAS challenges hindering the growth of LBS in
services are available at higher price in India is the lack of awareness. So market
urban areas. Since the next wave of growth leaders are now focusing on creating
is expected from this segment, VAS awareness and educating the mobile users
vendors will be focusing more on providing on the concept of LBS introducing newer
new services to cater to this segment. devices with navigation capabilities. They
These applications in VAS are reducing the need to have focused marketing campaigns
digital divide between rural and urban besides showcasing live demonstrations of
sectors. the service at various touch points
(shopping malls, concept stores, airports
IVR systems in local language would be etc) across the country.
more popular in the rural scenario.
Social networking, blogging, browsing and
streaming on mobiles will see an There will be an adoption of enterprise
exponential increase. In Q1 2010, around mobility technologies and applications to
14.5 mn users accessed social networking increase business efficiency and to deliver
sites via applications on mobile and around an enhanced level of customer experience.
30 mn via mobile web browsers. Out of the Enterprises are adopting IP
total users, Orkut and Facebook users were communication i.e. IP telephony, unified
14.4 mn and 8mn respectively. The main messaging and voice mail for their voice
drivers are the tie-ups between operators solution. The market has grown by 7.3% to
and social networking sites, availability of `2200 Cr in FY 2009-10 and is expected to
cheaper smart phones, popularity of social grow to `2467 Cr in 2010-11.
networking sites, innovative pricing model
like pay per site and network coverage even
in rural areas.
LBS is expected to be the next killer
application, which will help cater to a variety
of needs including public safety, consumer
and enterprise services etc. So telecom
operators, handset vendors and GIS
companies are now focusing on paid
Low cost broadband and cost effective VoIP
services like traffic updates, navigation,
are driving this segment.
point of interest (POIs), location based
advertising etc. LBS is expected to cost Audio-video conferencing industry
between Rs `100 to 500 a month for continues to be on a growth trajectory and
corporate users and Rs `30 to `100 for has become a popular mode of
individual users. communication in the enterprise segment.
Revenue from this segment increased by
Even a subscriber having a very basic
15.2% during FY 2009-10 to `265 Cr and is
handset can subscribe and enjoy these
expected to exceed `335 cr in 2010-11. The
services, as many of these application use
major drivers for this growth are
SMS and USSD platform. One of the main
Outsourcing, offshoring, globalization, Operators are looking at services like IPTV,
mobile workforces and telecommuting. 3G WebTV and MobileTV. They have already
and WiMAX will be favorable for High started working on mobisodes, which are
definition videoconferencing (HDVC). This mobile episodes, formatted for mobile
will also enable the BPO industry to explore phone users. These are relatively shorter in
high quality video-based call centers and length i.e 3-5 minutes. Mobile TV is at a
hire “work from home” agents. Education very nascent stage in India. Initially it will
and healthcare segments will also show an cost around `1.2 for GPRS and content
inclination towards visual collaboration charges of 10 paise per KB, to completely
technologies. download and watch a mobisode. We will
be seeing variety of pricing model like:- pay
Convergence per view, daily/monthly rental etc to cater to
Telecom operators will focus more on the different need of users.
providing bundled services to its subscribers CONCLUSION
in order to increase the stickiness. One of
the major applications will be Regional content, mobile internet, location-
based service, Mobile TV, and M-commerce
M-Commerce: - Mobile will become an will emerge as applications of the future.
important means of providing remote Enterprises will explore the VAS market to
financial and commercial services with a increase the stickiness of the subscriber. 3G
maturing MVAS market and support of RBI will play a crucial role in shaping the
for mobile banking services. wireless industry and providing triple play
M-commerce focuses on banking the services.
unbanked person. The various services that
can be used with m-commerce are m-
banking, m-shopping, m-ticketing, m-
marketing, m-entertainment etc. But at
present m-Payment market is still at its
infancy with the current daily transaction in
the range of 5-10 million. Reserve Bank of
India is also taking initiatives to promote m-
commerce, as it has increased the limit on
daily fund transfer per customer and
transactions involving purchase of
goods/services to `50,000. Although there
is a restriction for operators in becoming M-
Media convergence will be another service
provided by the telecom operators.
Presently operators are providing a service
in which a subscriber can record a T.V
program on their DTH via their mobile.