India?s mobile revolution is there for all to see?research firm Gartner predicts that the number of mobile connections will reach 815 million this year, rising by 8% over last year. But the fact this rise will have little effect on the market?which will remain nearly unchanged from last year, at $19.2 billion, Gartner says?is indicative of how constained the telcos are for revenue realisation. There is a possibility that by the end of this year, India would have accounted for just 2% of the world?s mobile services revenue while hosting 12% of its mobile connections.
Voice average revenue per user (ARPU) is eroding while data ARPU, though growing, is unable to bridge the gap as the uptake is still far below potential. However, this could soon change. As per IDC, smartphone sales grew 186% in Q1 2014 over Q4 2013, on the back of the low-cost models in the market, which shows that India?s appetite for data services is surging at a phenomenal rate. Given how the gap between data and voice tariffs in India is quite low?according to a Morgan Stanley report, Indian telcos, on an average, have priced 1 MB of data at nearly 83% of the charge for one minute of talktime?as data uptake increases, the erosion in voice ARPU is expected to be met more efficiently. More so, because usage of internet-enabled voice- and video-call services, provided by the likes of Skype, Viber, etc, will grow and users on both ends can be charged for data usgae. Till this happens, telcos can focus on mobile broadband, as Gartner suggests, given the low penetration of fixed line broadband, if revenue is to grow.
