Growth Opportunities in Indian Mobile Operator Segment

The MVAS, UCC, User verification norms based regulation is hurting VAS revenue for the last six to eight quarters. The regulations clearly impacted SMS and IVR based VAS services and products. The mobility messaging and other VAS revenue share came down from 10-11 % (Q4, FY12) to around 8% (Q3,FY13, consolidated one) whereas data revenue reached to 6-7% (Q3, FY13) from 3% (Q4, FY12). Moving forward, Mobility industry would experience further negative growth in high single digit QoQ for next few quarters reflecting the regulation clause of getting the authorization from user before activating MVAS services. Any authorization process based on IVR, SMS or email may experience low adoption by the consumer due to multiple surrounded reasons. It would clearly impact on Messaging, IVR, Music, RBT, ODV and SMS based delivered, activated Applications. The expected market size of total and non-voice mobility market size may touch $ 32 Bn & $ 5.7Bn (including data and other services). On-going revenue trend suggest that Mobile operators may be able to generate close to $ 2.3Bn from data services neutralizing the loss of MVAS revenue share. According to TRAI performance indicator report, 49% of the total mobile user devices are data capable and that translate it to 440Mn pulse potential total addressable market. With the current paid data user base of around 140 Mn generating slightly lower $1 ARPU present great opportunity to convert lost revenue opportunity into new revenues. Based on the numbers and trend, Mobile operators are losing more revenue than generating. With the population base of 65% as youth, opportunities are offered for mobile operators for smooth transition from SMS, IVR & Voice based and dominated MVAS to data centric MVAS services. The MNO’s are actively refining and defining their evolving delivery mechanism to make it interoperable, portable, and secured through cloud centric and OffNet/OnNet supported environment to capture the un-captured.
The super hyped 3G & BWA - $13 Bn in license auction and another $ 10 Bn in network upgrade investment stretched service providers balance sheet to the limit and their 30% EBITA is used to service debt burden. The slow 3G service user acquisition which stands at around 30 Mn worsened the situation. In the BWA segment only few operators are able to launch their services. Most of the observer started writing down India 3G story as none of the mobile operator covers all circles and regulatory/legal dispute on 3G roaming. It might have dented user confidence to opt for the service. In India, only 8-9% of the total mobile users are frequent travellers and would require seamless roaming. I believe strongly that slow adoption will gather pace with the higher adoption of enabled handset, lower cost through cutting edge delivery platform. The dedicated and priority based QoS, security, data protection, online storage space and dynamic charging model would attract more and more user base. The recent data revenue and user growth is going to act as catalyst for ecosystem players to focus on data centric services, product or application development instead of focussing on auto cycled legacy MVAS product line. The paid applications download is going to experience high double digit growth QoQ for next few years from current run rate of 7-8 million download per month. In my opinion, the incumbent mobile operators must create and invest heavily on new product development research and development to keep on fulfilling user adoption and usage trend pattern quickly instead of relying on MVAS players’ product lines. The mobile operators can easily invest by reducing advertisement cost by 2% as mobile operators at an average invest 10% of their revenue on advertisement. The continuous investment on brand building by most of the mobile operators for the last 10 years created an environment where these brands are household name and thus now they can afford to reconsider their strategy on advertisement investment cut
The innovative services offering product lines to manage Consumer and Prosumer VAS across connected device environment would kick-start VAS revenue growth. The realignment of consolidated SDP into multiple virtual service delivery platforms is needed in order to cater voice, data and video centric VAS portfolio. It would enhance the QoS w.r.t service creation, execution, activation and provisioning. It would also offer granularity in B2B and B2C usage mirroring, higher renewals and increase user adoption.

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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Tuesday, 19 February 2013 at 01:05:00 GMT-8 delete

can we get some detail of Indian Mobile handset market growth