 "Resting on small laurels could turn out expensive for telcos")
It is o ften argued, and rightly so, that a mass acceptance of mobile broadband is mostly about having a developed ecosystem in place - which includes not just service availability but also a range of devices to choose from and a plethora of apps to harness.
In India, that is not enough. Given that the larger subscriber mass is located in the middle and bottom parts of the country’s socioeconomic pyramid, the affordability of devices, services and apps have been expected to play a much more important role.
The service providers, partly driven by the astronomical costs of the 3G spectrum that they acquired, had hoped to defy that logic, but in vain. They had the realisation soon enough and in May 2012 drastically slashed the 3G data prices, by up to 80%.
That, however, was probably not enough. The large-screen smartphones—the users’ interfaces for mobile Internet experience—still carried price tags that appeared prohibitive to a vast majority of potential users.
Thankfully, the home-grown smartphone phenomenon happened to peak just at the right moment. The last one-year period has seen the domestic vendors do a repeat of what they did in the feature-phone segment about six to seven years ago, when they had caught the global mobile phone leaders almost by a surprise, while packing more features at much lesser price points.
This time too, the domestic vendors have succeeded in capturing the fancies of Indian smartphone buyers by offering high-end features at nearly half the prices of their global smartphone counterparts.
For example, smartphones with features like 13 megapixel rear camera and 5 megapixel front-facing camera, supported by a five-inch HD display and powered by 1.5 GHz quad-core processors and Android Jelly Bean OS are now available at less than Rs 19,000. Just about a year ago, such powerful features were possible only at around Rs 40,000.
In the lower price segments too, an Android powered smartphone with 1 GHz dual core processor, 3.5-inch touch-screen, 3 megapixel rear camera with LED flash and a front-facing 1.3 MP camera is a reality.
What does that signify for the 3G market in near future? Well, most importantly, it implies that rich smartphone experiences that were earlier available only in the premium price segments, are now being tasted by potential 3G users across many more price segments.
Not surprisingly, smartphones are becoming a mass phenomenon, on the back of an already evident rapid growth. The number of smartphones to be shipped in the country during calendar year 2013 is expected to almost double over the previous year.
That would be a direct result of the devices becoming much more affordable for a much larger base of customers.
The third element of the ecosystem essentials, apps, has already been addressed by a swift and steady maturing of the open mobile OS platform Android and its apps store. (The underlying ecosystem of hardware components, including processors, RAMs, flash memories and display units had been addressed much earlier by mobile phone makers.)
The 3G ecosystem has finally been made for India, and the results have already been there to see.
The uptake of 3G data has increased almost exponentially in the last year, as recent quarterly reports from telcos have shown. And after telcos further slashed data prices in July 2013, the uptake is only bound to accelerate.
But there are concerns that going forward telcos could face a lack of network preparedness in providing quality mobile broadband experience to their subscribers.
For example, Bharti Airtel’s 3G user base reached 6.8 million in the April-June quarter of 2013, with a whopping 83% growth over the year-ago quarter. However, the telco reportedly added a mere 1,031 3G sites during the quarter. Moreover, there was a concern as its mobile services capex declined 57% year-on-year. This could have been a reason why the quarter-on-quarter 3G subscriber growth for telcos stayed at a mere 6%.
Indeed, the network infrastructure growth must keep pace with the mobile broadband ecosystem development, for telcos to realise the full benefits of an upcoming boom.
Deepak Kumar is Founder Analyst at BusinessandMarket.net and specialises in market research and strategic advisory
Mobile phone image via Shutterstock.com
In India, that is not enough. Given that the larger subscriber mass is located in the middle and bottom parts of the country’s socioeconomic pyramid, the affordability of devices, services and apps have been expected to play a much more important role.
The service providers, partly driven by the astronomical costs of the 3G spectrum that they acquired, had hoped to defy that logic, but in vain. They had the realisation soon enough and in May 2012 drastically slashed the 3G data prices, by up to 80%.
That, however, was probably not enough. The large-screen smartphones—the users’ interfaces for mobile Internet experience—still carried price tags that appeared prohibitive to a vast majority of potential users.
Thankfully, the home-grown smartphone phenomenon happened to peak just at the right moment. The last one-year period has seen the domestic vendors do a repeat of what they did in the feature-phone segment about six to seven years ago, when they had caught the global mobile phone leaders almost by a surprise, while packing more features at much lesser price points.
This time too, the domestic vendors have succeeded in capturing the fancies of Indian smartphone buyers by offering high-end features at nearly half the prices of their global smartphone counterparts.
For example, smartphones with features like 13 megapixel rear camera and 5 megapixel front-facing camera, supported by a five-inch HD display and powered by 1.5 GHz quad-core processors and Android Jelly Bean OS are now available at less than Rs 19,000. Just about a year ago, such powerful features were possible only at around Rs 40,000.
In the lower price segments too, an Android powered smartphone with 1 GHz dual core processor, 3.5-inch touch-screen, 3 megapixel rear camera with LED flash and a front-facing 1.3 MP camera is a reality.
What does that signify for the 3G market in near future? Well, most importantly, it implies that rich smartphone experiences that were earlier available only in the premium price segments, are now being tasted by potential 3G users across many more price segments.
Not surprisingly, smartphones are becoming a mass phenomenon, on the back of an already evident rapid growth. The number of smartphones to be shipped in the country during calendar year 2013 is expected to almost double over the previous year.
That would be a direct result of the devices becoming much more affordable for a much larger base of customers.
The third element of the ecosystem essentials, apps, has already been addressed by a swift and steady maturing of the open mobile OS platform Android and its apps store. (The underlying ecosystem of hardware components, including processors, RAMs, flash memories and display units had been addressed much earlier by mobile phone makers.)
The 3G ecosystem has finally been made for India, and the results have already been there to see.
The uptake of 3G data has increased almost exponentially in the last year, as recent quarterly reports from telcos have shown. And after telcos further slashed data prices in July 2013, the uptake is only bound to accelerate.
But there are concerns that going forward telcos could face a lack of network preparedness in providing quality mobile broadband experience to their subscribers.
For example, Bharti Airtel’s 3G user base reached 6.8 million in the April-June quarter of 2013, with a whopping 83% growth over the year-ago quarter. However, the telco reportedly added a mere 1,031 3G sites during the quarter. Moreover, there was a concern as its mobile services capex declined 57% year-on-year. This could have been a reason why the quarter-on-quarter 3G subscriber growth for telcos stayed at a mere 6%.
Indeed, the network infrastructure growth must keep pace with the mobile broadband ecosystem development, for telcos to realise the full benefits of an upcoming boom.
Deepak Kumar is Founder Analyst at BusinessandMarket.net and specialises in market research and strategic advisory