Mobile growth in India fastest, but realisations lowest

Mumbai, Nov 20 | Updated: Nov 21 2005, 05:43am hrs
India, the fastest growing mobile market in the Asia-Pacific region, is also the one with the lowest realisations. It is the only country among China, Singapore and Australia, to have a single-digit average revenue per person (ARPU) of $8. Mobile usage, despite being the highest at 287 minutes per month, is largely voice-driven.

Australia has the highest ARPU of $33 followed by Singapore with an ARPU of $32 and China with an ARPU of $12. "It can be seen that ARPU in India is the lowest though usage is very high," the Telecom Regulatory Authority of India (TRAI) observed in a communication.

According to research firm Gartner, the ARPU in India is set to fall even further to $3 - $5. "A large proportion of the market opportunity will comprise low-income users resulting in low ARPU. Overall penetration and market opportunity will increase but with thinner margins," according to Gartner principal analyst for telecom for Asia-Pacific, Kobita Desai.

However, Gartner forecasts mobile data, which is currently around 9% of revenues, will increase to 20% of revenues in 2009.

Mobile value-added services (VAS), which can be charged at a premium, are still very limited in India with most operators concentrating on expanding their networks rather on VAS.

VAS in India mostly consists of nice-to-have features such as downloadable ring-tones, caller tunes, themes and wallpapers rather than useful services, which drive more premium usage.

According to mobile content providers and aggregators, the revenue share in India is skewed in favour of the operators as a result of which not much content is created and made available for the mobile.

"Nobody wants to get into the mobile VAS business," says Probhir Roy of Coruscant Tec, which works both as a content provider and aggregator.

According to Mr Roy, content providers in India typically get 12% - 25% of the realisation going up to maximum of 35% in some cases, as opposed to countries like China where the content providers get about 85% of the realisation.