According to a recent report by Gartner, India’s mobile services market will reach Rs.1.2 trillion in 2013, up 8 percent from 2012 revenue of Rs. 1.1 trillion. As per the report, mobile connections will grow to 770 million in 2013, an 11 percent increase from 712 million connections in 2012.
Shalini Verma, principal research analyst at Gartner said,”The mobile market in India will continue to face challenges if average revenue per unit (ARPU) does not grow significantly. If the prevailing conditions do not change in the Indian telecom market, India will account for 12 percent worldwide mobile connections, but just 2 percent of worldwide mobile services revenue (in constant USD) in 2013.”
The report found that Indian telecom operators are faced with two major challenges – growing their profit margin in the face of intense competition and successfully competing with over the top service providers, such as Facebook and WhatsApp.
“As mobile voice services continue to get commoditized in the country with the increased use of voice over IP (VoIP) and the probable termination of national roaming charges, mobile broadband is the area of opportunity for operators,” said Ms. Verma. “India has a phenomenal pent up demand for mobile broadband and local mobile apps that solve everyday problems for consumers. Smaller mobile broadband plans using a sachet-style usage pattern appeal to Indian consumers.”
As per the report, Indian telecom operators need to think of growing the top line through innovative services. Further rural expansion of mobile services will come at a cost. In India, innovation in utility apps that help bring efficiencies in a consumer’s life will bring in sustained revenue and will be relatively more difficult to replicate by new entrants. While social and video apps are doing extremely well in India, Ms. Verma said it is time to look beyond these and deliver apps that can have a sustained business model. Operators need to insert themselves into the value chain of these new apps and services.