Indian Telecom space is heating up and how! Gartner’s research predict wireless services to hit $25.61 billion by year 2011. Year 2006 figures touched $2.95 billion making the growth per annum to be 18.4% per annum in the period 2007 – 2011. As expected, growth in data revenue will outpace voice revenue with a contribution of 22% in total wireless revenue in year 2011 as opposed to 9.6% in 2006.
Despite rapid expansion of wireless services in India, only about 2% of rural areas are covered while the total coverage area is 12.7%. Gartner predicts that of the expected 38.6% total coverage, 58% will be rural based connection and 95% will be urban connection.
Drivers which we feel will fuel this growth are:
# Lower entry level tariff
# Under $25 handsets with current emphasis on research to provide entry level handsets
# Attractive pricing of bundled up services with handset
# Increased focus on rural marketing of cellular services
# Greater efficiency in deployment of services
# Integration of market players
# Concentration of telecom operators to provide core service and marketing of these services
# Further drop in call rates to match the landline rates
# Expansion of businesses in semi-urban and rural areas
# Availability of wider array, localized and user specific mobile Value Added Services
With the subscriber base expected to be 462 million by 2011, user friendly simple-to-use applications that can tap into the needs or aspirations of users will see fast adoption. Each region has its own need, but certain common denominators exist. Entertainment will always remain the primary desire of a subscriber (besides connectivity, of course). Whether we take up from current scenario of TV and movie based entertainment or create new genres, Value Added Services developers and provides are never going to be short of space to expand.
And then there are services that fulfill needs of the users. Rural areas, which lack means of dissemination of information, will adopt such services if they are available at affordable prices. One of the most exciting applications will be the related to medical facilities. These facilities are relatively inaccessible to rural population. Their availability by means of video conferencing or even as a voice service is a space waiting to be tapped. Urban population, which is used to greater array of services, will demand their availability on mobiles.
Data revenue at rate of 22% of the predicted $25.61 billion works out to be $5.63 billion – enough to keep the existing players excited and attract new talent into this space.