Zinnov, a leading market expansion and globalization advisory firm, today released its much awaited study to evaluate the Indian Telecom Market for 2012 in its report, titled, ‘Indian Telecom Market Overview 2012’. The study covers in detail the overall industry growth, key technology trends and government regulations that have shaped the growth of the Indian telecom sector.
Key findings of the study are:
- mVAS, Cloud and Data Center Services New Revenue Generation Opportunities for Telcos.
- More than 3-fold increase in subscribers since 2008
- 64.4{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of the current subscribers are urban.
- Total wireless segment accounts for 933.7mn
- Wireline accounts for a 3.2{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of the overall market
The released study found that the Indian telecom industry, characterized by a large subscriber base, substantial tele-density but low revenues per user (ARPU), has witnessed a 3-fold increase in subscribers since 2008. The wireless subscriber market stands at 933.7 mn subscribers and is dominated by Bharti while the wireline segment stands at 31.4mn connections dominated by BSNL.
The report also highlights new avenues for revenue generation for the telecom companies, like mVAS, cloud and datacenter services which in turn are providing ample opportunities to IT companies. Currently Data center market and capacity in India is valued at over USD 4.0 billion and is expected to reach at approx. USD 6.0 billion by 2014; nearly 1/5th of this segment is governed by third party while the rest is captive; Lack of in-house skills, high investments, and long gestation periods pose challenges for captive data centers in India.
Additionally another trend has been noticed by rising focus on MVAS opportunities necessitated by declining share of voice in telecom Average revenue per user (ARPU). Indian MVAS market is expected to move from the traditional SMS based services to Internet based and app based services. Currently valued at over $5 billion Indian MVAS industry is expected to reach well over $6 billion by 2013.
Recently emerging MVAS categories are highlighted below:
M- Health– Leading telcos such as Vodafone, Airtel & Aircel are partnering with healthcare companies to deliver m-health services, typical services include provision of locating hospitals, fixing appointments, registration, medical advice, facilitating treatment and blood donation process
M- Governance– Amidst visible traction for M-Governance in India, government has pushed m-governance framework to aid adoption, many Indian states such as Kerala, Gujarat, Bihar, Goa & Andhra Pradesh have initiated m-governance practices primarily through SMS-based platform
M-Education– Major telecom players are enabling mobile platform as a medium to impart education for instance : Aircel and MTS partnering with NGOsfor underprivileged children educational initiatives; Reliance communication delivering interactive, real time courses across 105 cities; Airtel imparts education through IVR which includes English speaking courses at basic level
M- Commerce– Telecom carriers increasingly taking interest in m-commerce services as the government aids through reforms such as M- Microfinance, M Retailing and Mobile wallet services. Some of the recent government initiatives include increase mobile payment limit to INR 50,000 by RBI, Creation of Interbank Mobile Payment Service (IMPS), by NPCI along with 6 Nationalized banks and RBI granting Semi-Closed Wallet licenses to telcos
M- Agriculture– These services bridge the information gap between the farmers and market conditions. Key services include commodity prices, local info, weather updates, multiple language support etc. Reliance communication provides its service called Grameen VAS while Airtel has Bahtar Zindagi
M-Infotainment– Almost all leading telecom companies provide information and entertainment related services. Infotainment is the largest contributor to overall MVAS revenue; categories such as Sports, Travel, News Content, Ringtones, Music & Videos are largely covered in the segment
Speaking about the study, Mr. Praveen Bhadada, Director-Market Expansion, Zinnov Management Consulting, said, “This study examines various trends that have shaped adoption of IT across the entire value chain of the telecom vertical. IT spending in the telecom vertical is mature and has grown at a rate of 14.3 percent in FY 12 and has reached $2.4 billion out of which the maximum spending takes place in hardware followed by services and BPOs. Focus on 3G and LTE has forced many telcos to re-look at modernizing their IT systems. Additionally, new avenues for revenue generation for telecom companies like mVAS, cloud and datacenter services are providing ample opportunities to IT companies, with whom service providers are looking at establishing strategic partnerships. Further to this, it is interesting to know that the IT spend in this sector will cross over $7.0 billion by 2020.”
Telecom companies are facing some challenges in IT adoption which includes: Lack of clarity on consumer preferences, uncertain government regulations, predictability of future IT requirements is difficult, falling ARPUs affecting profit margins, management issues in PSUs, high operation costs in remote areas.
Last but not the least and drawing some analysis on the government regulations, the study read that a host of regulatory changes are being sought through the National Telecom Policy – 2012 such as- Promoting R&D and manufacturing in domestic telecom equipment industry, moving towards a unified license regime through which revenue could take a hit of as much as 5{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} due to roaming abolition, permitting spectrum pooling, sharing and trading, making additional spectrum available every five years and framing policies to ensure rapid expansion of cloud services and technologies.
