How telecom can enrich billion lives in next few years?

How telecom can enrich billion lives in next few years?

v  Bridging the digital connectivity gap

·         Overall telecom penetration gap – VLR (Active mobile customers)- 707.3m; If we exclude multiple connections[1] and ~325m population below age of 15[2], somewhere about 375m Indians do not have an active telecom connection yet.

·         Rural telecom penetration gap – Almost 500m rural population does not own a phone

·         The rural mobile subscriber base is anticipated to grow at a compound annual growth rate of 12% between 2012 and 2016, at nearly twice the expected growth rate of the saturated urban market. It is likely that 62% of the new mobile subscribers added in the next five years will be from the rural market.^[3] The National Telecom Policy (NTP) 2012 also envisages to increase rural teledensity from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020.[4]

·         Internet access gap is likely to be bridged in next few years by mobile broadband. 3G subscribers are expected to reach 142 million by 2015, accounting for 12% of the total wireless subscriber base. Further, 3G subscribers are expected to be more than 300 million by 2020, accounting for 20% of the total wireless subscriber base.[5]

v  Financial Inclusion through Mobile Platform   

·         Primary attribute of inclusive growth is financial inclusion which requires  greater access to capital.

·         Out of approx 1200 million of Indian population, nearly 70 percent lives in rural locations and over 90 million rural households are on farming.

·         Approximately 27 percent are indebted to formal sources and 13 percent are availing loans from the banks in the annual income bracket of INR 50,000 or less.

·         Millions of people in rural India have little or no access to credit, even from non-institutional sources. Approximately 50 million farmer households in India have not taken any bank credit so far

·          Rural banking does not appear to be a financially viable activity for banks either.

·         Banks have ~7.4 lac point of sales, ~ 1 lac ATMs, ~94000 branches of scheduled commercial banks[6] , 18.3m credit cards and 302m debit cards[7]. Whereas Telecom Service Providers have ~150 Lac point of sales and cover 80% of Indian geography.

·         Mobile platform by creating a branchless banking system for the communities can be a  potential tool for financial inclusion. 

·          Low tariffs and low cost of handset provide a clear value proposition for driving financial inclusion through mobile platforms.

v  Efficient delivery of public services

·         By virtue of their ubiquitous nature, mobiles enable anytime, anywhere access to and delivery of services, bridging the last mile gap without huge upfront investments, even from rural and remote areas of the country, where computer and internet penetration is still low.

·         Department of IT  finalised the Mobile Governance Policy Framework in January 2012

·         The Framework  addresses  many essential issues that can help efficient delivery of public service through mobile

o    making government websites mobile-compliant,

o   developing mobile applications  in open standards to become interoperable across various operating systems and devices,

o   use of uniform/single pre-designed numbers in the form long/short codes for mobile services,

o   creation of Mobile Service Delivery Gateway (MSDG) as the core integrating infrastructure for multi-channel delivery

·          Department of Information Technology (DIT), Government of India, has created National e Governance Division (NeGD) as an autonomous business division within Media Lab Asia, under the Ministry of Communications and Information Technology, Government of India, for taking up the tasks being carried out by the Programme Management Unit National e-Governance Plan (PMU-NeGP) at DIT. NeGD through Centre for Development of Advanced Computing (C-DAC), has been developing the modularly-scalable Mobile Service Delivery Platform and Gateway (MSDP/ MSDG)

·         Strengthening this framework and bringing more and more government schemes and services under it in next few years can help to bring in inclusive growth

v  Effective transfer of benefits under govt. schemes

·         The service, based on mobile phones and biometric authentication, can form the core micro-payment platform for the transfer of benefits under various government schemes

v  Creating more jobs

·         Research conducted by ITU and several other entities have shown direct correlation of increased telecom penetration and broadband access to economic development

·         While the telecom industry in the rest of the world obtains 35-50% revenues from non-voice services, India derives only ~15% of sales from non-voice/ data services. Projections by UBS for major telecom players in India indicate that the non-voice revenues are going to be ~30% of total revenues for these players by 2020 With digitization of cable TV services, convergence encompassing TV, broadband and Telecom is possible. All this will shift the focus towards multi lingual content creation and VAS innovation.

·         More jobs expected in telecom related equipment and handset manufacturing, network expansions etc

What should be the policy focus?

·         Further improve percolation of internet/broadband

·         Improve impediments(like Right of Way and tower site clearances) for creating physical infrastructure

·         Further enhancement of network capabilities (esp. Optical fiber network) in rural areas

·         Improve resilience/robustness of  mobile infrastructure esp. for  remote areas

·         Bring down cost of entry level handsets to below Rs 500 & smart phones and tablets to below Rs 2500; Make available multi-lingual handsets

·         Foster innovation in local/rural content and VAS with a focus on regional languages

·         Promote R&D and indigenous manufacturing of telecom and related equipments

·         Complete integration of mobile delivery infrastructure with the core e-Government backbone infrastructure. 

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[1] GSMA report says on average every mobile users in India has 2.2 SIM, compared to worldwide average SIM per person of 1.85;  If we take world average of 1.85 it means of 921m subscriptions in India, the unique subscribers are about 497.8m

[2] http://www.nationmaster.com/country/in/Age_distribution

[3] Source – Evalueserve research estimates  www.evalueserve.com  

[4] http://www.dot.gov.in/ntp/NTP-06.06.2012-final.pdf

[5] Enabling the Next Wave of Growth in India : Ernst &Young  and FICCI

[6] excludes rural post offices -1.15 lac , co-operative banks, agricultural credit societies, self help groups etc

[7] http://www.rbi.org.in/scripts/ATMView.aspx

Verizon to offer wireless wallets to their subscribers

Verizon Wireless has announced their m-commerce service, enabled as a BREW application from technology partner obopay as the first mobile payment offering for any major U.S. carrier, will be available in the coming weeks. The Obopay service will allow customers to receive, send and spend money via their mobile phones, check their account balances, collect money owed from other mobile users, view transaction histories and invite friends to use the system.



With the recent announcement of Verizon Wireless about its partnership with Obopay, analysts are seeing a bright future for mobile payments and for mobile commerce as a whole. Even research firm Strategy Analytics Wireless Media Strategies has reaffirmed its forecast on contactless payment. Wireless Media Strategies Service in their December 2006 report has predicted significant activity in the form of payment and ticketing trials towards the end of 2007 and maintain our projected outlook of $36 billion in spending via contactless payment interfaces on mobile phones by 2011.

Future growth trends in mobile industry - Greener pastures ahead !!

During last few months I have come accross several reports on future growth projections on mobile industry. Some of this data have already been posted on my blog. I thoought it was a good idea to compile some of these projections at a single place so that the readers can conviniently co-relate them. The various sources from where these projctions have been taken are also quoted below.

Mobile advertising worth $14 billion in 4yrs (2011)


Predictions and suppositions on the future evolution of mobile advertising have been going by for some time now. The latest comes from a Strategy Analytics report and says that advertisers hope on reaching more than USD14 Billion by 2011.Still, just recently, debates have emphasized the fact that mobile advertising is considered by many companies as being rather risky and less profitable than the TV alternative. This comes from the fact that the video content they use is still in a primary state and there is room for a great amount of improvement. One thing that might attract companies as to choose mobile phones for placing their advertisements is exactly the fact that this environment is yet little used. This means that it proves to be considerably easier for an announcement to stand out and be fully received by the handset users when there are no other adverts around to distract him from this specific one. The outlook for mobile advertising spend has significantly advanced in the past 12 months. The supply of advertising inventory is rapidly increasing as mobile publishers look to develop advertising as a revenue stream. Major mobile network operators like SprintNextel, Verizon Wireless and Vodafone have all accelerated plans to sell advertising within their mobile media channels and advertisers appear to be responding positively. The Strategy Analytics report also regards game downloads, mobile broadcasting and video on demand, all used as spaces for mobile advertising. Even more, several advertising companies have teamed up with mobile software and service providers in order to better develop means of reaching high profit rates.

Mobile apps worth $66 billion over 5 years


The transformation of variousenterprise applications from fixed to mobile access technology will generate more than $66 billion in carrier service revenue over the nextfive years, says a new market research report from Insight Research Corp.By the close of 2007, service revenues generated by mobile applicationstraversing wired and wireless networks in the US will reach just over $9billion; by 2012, the value of services revenue supporting thoseapplications is forecasted to grow to nearly $13 billion, according to thenew market study. Insight's newly released market analysis report, "The Mobile Workforceand Enterprise Applications 2007-2012," states that telecommunicationsindustry consolidation and job growth in the services sector are bothspeeding a transformation of various enterprise applications to a mobilityenvironment. Citing Bureau of Labor statistics, the study finds thatoccupations working outside of corporate offices are increasing at a muchfaster rate than average employment growth. At the same time, consolidationwithin the telecommunications industry has put all of the requisite pieceparts required to deliver integrated wireless applications within the handsof the remaining companies. "Analyze AT&T, Sprint, or Verizon and you will find that each companynow commands the local, metro, long-haul, and wireless assets required todeliver an end-to-end corporate solution," says Robert Rosenberg, Presidentof Insight. "Equally as important is the fact that these companies areshifting capital expenditures from infrastructure to service control,managed services, and applications. This shift in resource allocations willbenefit enterprises looking to mobilize their traditional applications, soin the months ahead we see a real rush to develop mobile applications,"Rosenberg concludes.

Mobile games worth 11.2 billion by 2010


Total global revenues from mobile games are forecast to increase from USD 2.6 billion (2005) to USD 11.2 billion by 2010, according to Mobile Games, a new strategic research report from Informa Telecoms and Media.
Downloads will account for around two-thirds of total global revenues through 2010, but online multiplayer traffic will start to generate significant income for mobile operators, as cellcos launch more multiplayer games and introduce community features that will encourage user uptake. By 2010, online multiplayer games will generate 20.5 percent of total global revenues.
"The Asia-Pacific and Europe will continue to dominate the global mobile gaming market in terms of revenues and users," says Pamela Clark-Dickson, co-author of the report, and editor of continuous research service Mobile Games Analyst, published by Informa Telecoms and Media. "However the U.S. is set to become the second largest individual market by revenues and users, behind Japan and China respectively, by 2010."
Meanwhile the mobile games industry still has work to do to encourage mass-market adoption of mobile games. This year, just 6.7 percent of all mobile subscribers globally will download and play a mobile game, rising to 15.2 percent by 2010.
"The cellcos' strategy of targeting hardcore gamers was the right thing to do when the market was in its early adopter phase," says Stuart Dredge, co-author of Mobile Games and reporter at Mobile Games Analyst. "But now what the market needs is mass-market take-up, which means that the mobile games industry has to provide games that will encourage more casual users to play."
Merger and acquisition activity is thinning out the mobile games market, especially in the games development and publishing sectors. The race is on to acquire the smaller mobile games companies whose survival to date has relied on the production and distribution of good quality games based on desirable licenses, but which haven't been able to scale their operations.
"Previously consolidation occurred mainly among mobile games companies but recent acquisitions and investments by vendors such as RealNetworks and Cisco Systems attest to a growing interest in this sector from the wider digital media and information technology industry," says Clark-Dickson.
Mobile games companies will also likely embark on brand-building and consumer marketing activities during 2005, as they launch their own direct-to-consumer offerings, and seek to build the profile of mobile gaming in the marketplace.
While the cellcos' decks will continue to be the primary source of games for mobile users, games companies have also started distributing their titles through third-party content portals and through bricks-and-mortar retailers.
"Multimedia memory cards will become an increasingly important games delivery mechanism at retail, particularly for 3D and feature-rich 2D titles," says Dredge. MMCs will contribute 9.1 percent of total global revenues for mobile games by 2010.



Mobile entertainment worth $76 billion by 2011


The mobile entertainment industry, if actualized, could reach a potential of $76 billion by the year 2011, a recent study conducted by technology market analysts Juniper Research claims. Made up of music, games, TV, and sports, the entertainment business via mobile phones has a set stage for an explosion of mobile entertainment in the coming years.

“The face of mobile entertainment is expected to change significantly over the next five years as next generation mobile services continue to be rolled out around the globe and take up steadily increases,” said Juniper Research Mobile Entertainment principal author Bruce Gibson in a company press release.

This mobile entertainment industry could reach the $76 billion mark, up from $17.3 billion in 2006. One of the main reasons for the potential boom is the current wave of third generation networks, which offer the bandwith to support mobile entertainment . Other factors include the rise of mobile video feeds and live mobile TV. Supplemented by a growing market in Asia, the mobile entertainment industry could grow along with it.

Juniper Research warns opening up a Pandora’s box for perturbed mobile users. The possibility for the monetization may be eclipsed by possible pitfalls such as gambling or pornography. These two factors alone could impinge on the successes of this untapped market.

“Whilst the potential to generate dramatically increased revenues is certainly there, many uncertainties affecting sections of the market still exist and could put a break on growth – the development of legislative environments for mobile gambling and adult content, and the success of broadcast mobile TV trails currently underway or planned, are just two examples,” said Gibson.

Mobile social networks worth $13.1 billion by 2011

Red Herring (04.16.07) reported that according to London-based Informa Telecon and Media mobile communities and user generated content (often bracketed together as social networking) will be worth $13.1 billion by 2011.

Mobile content to reach $43 billion by 2010


The global market for mobile phone premium content will exceed US$43 billion by 2010, according to a new study by iSuppli. This compares to the figure in 2004 which barely reached US$5.2 billion. Over the next four years, the market for such extra mobile services as music, gaming and video will expand at an annual rate of 42% argues the US-based research company.
According to Mark Kirstein, vice president of multimedia services and content for iSuppli, "After years of hyper growth, mobile phone markets in several major regions around the world are maturing, resulting in slower subscriber growth and declining average revenue per user for carriers. Meanwhile, new 3G networks offer increased bandwidth, but require compelling applications and content to drive revenue and provide a return on investment to operators. Against this backdrop, mobile-service carriers and content providers are establishing new business models to capture the growing opportunity."
The company believes that the main driver of premium mobile content services will be music, led by ring tones and ring tunes. iSuppli believes that this market alone was worth US$3.8 billion in 2004 and grew very quickly last year as the industry made a major transition from traditional polyphonic ring tones to ring tunes. Coming a close second in terms of growing popularity is mobile gaming, which the company believes grew by 80% in revenue terms last year. However, mobile video is seen as the best long term bet for expanding premium content services, even though the market for such services is still in its infancy.
The company argues that the success of mobile TV depends entirely on new phone deployments. According to iSuppli even with reasonably strong adoption of mobile-TV technology and subscribers, the installed base of TV-capable phones will only represent 12% of the total by 2010.

Mobile banking - Key to success is in developing 'anywhere' applications

In one of my earlier postings I have talked about the synergies whcih the Telcos & banks can enjoy in their operations. I have always been a strong supporter of Telcos (especailly in India) entering into banking sector. For those who are interested the study of South Africa can be helpful where telecom company has entered into banking space. The conditions in India (the number of people having bank account viv a vis tose having mobile/telecom subscribtion) are quiet same as the ones in South Africa. But recently I came accross a survey results on mobile-banking and thought I should share it. The highlights of the survey carried by JupiterResearch (The group advises major U.S. banks, which are working to expand mobile banking offerings, to experiment with services that leverage the mobile channel's characteristics to respond to the needs of three key consumers segments) are -

- people prefer to do their banking either online or in person, with research showing that, despite renewed efforts on the part of financial institutions, overall interest in mobile-banking services is limited.
- Just 8 percent of online consumers who own a wireless device are interested in using mobile browsing to check account balances.

Currently, Wachovia's nearly 6 million customers can use their cellphones or personal digital assistants to check accounts and to transfer funds. The mobile service requires an encrypted user name and password. In addition, the bank launched a third-party mobile banking application with AT&T Wireless and Firethorn that allows bill payment, which wasn't available in the initial Wachovia application. BancorpSouth, SunTrust Banks Inc. and Regional Financial Corp. have also selected Firethorn's mobile banking and payments system.
Visa USA launched its mobile platform in January and has made strategic investments in .mobi, ecrio (for barcode coupons and ticket purchases) and VeriSign (which will support the mobile platform). Rival card company MasterCard Worldwide also has a program that allows consumers to shop or bank with specific credit cards and debit cards via cellphones; users are required to enter a PIN, which assigns a one-time-only password for each transaction.
According to JupiterResearch, when developing mobile strategies, banks should consider the availability of mobile technologies (SMS, mobile browsing and client application) as well as the characteristics of mobile interactions.
"Banks should not offer mobile services that aim to mirror or duplicate the online experience," adds JupiterResearch President David Schatsky. "Online banking brought consumers the convenience of banking anytime. Mobile banking can add an anywhere element, but banks should identify where such ubiquity is crucial." To no surprise, his company identifies younger consumers as potential early adopters of mobile-banking services. Other interested demographics include consumers who already use mobile browsing as well as "under-banked" consumers who might not be banking online.