Christopher Richardson Issue: India 2015
Article no.: 3
Topic: The future of mobile connectivity in India
Author: Christopher Richardson
Title: CEO & Founder
Organisation: ONEm Communications Ltd
PDF size: 193KB

About author

Christopher Richardson is CEO and co-founder of ONEm Communications Ltd. He is a serial entrepreneur with a track record of success spanning over 20 years. He has global experience and has been a successful businessman.

Christopher’s management style is charismatic and he possesses motivational qualities that drive him and others to succeed.

Together with a group of like minded entrepreneurs and experts, he put together a team that have created a membership-based telecommunications Platform that is revolutionising a sector most have written off as too mature for new thinking.

ONEm is bringing internet style communications over ordinary mobile networks giving these legacy networks new ways to generate sorely needed revenues for Mobile Operators.

Innovating the industry, ONEm introduces a new era in global mobile communications.

Article abstract

In 2009, only 6.9% of workers had access to a smart device. By 2015, this figure had grown to 64%. Subsequently, mobile enterprise will increase in prominence and become a necessity for those in business through a number of mobile subscribers becoming progressively “comfortable with online content consumption, social networking and e-commerce” as reported by Salesforce.

This presents a good opportunity for enterprise capabilities to grow exponentially.
 

Full Article

Introduction
Telecommunications services are acknowledged globally as an essential tool for the socio-economic development and modernisation of a nation. India has experienced rapid growth, leading to a thriving economy and improved connectivity amongst citizens. Hi-tech mobile technology is becoming commonplace within the country, leading to India being the second largest telecoms market in the world. However, with pressures from India’s heavily regulated market, NET-neutrality plans and consumer data demands, there is now more competition than ever before.

Operators Squeezed
The GSMA has reported a prominent rise in the number of unique subscribers in India in the past five years. As of Q12010, there were approximately 212.2 million mobile subscribers. In Q12015, this figure had grown to 464.6 million. Further statistics from the GSMA show that 3G and 4G penetration has expanded from 1.1 million in Q12010 to 73.6 million in Q12015. According to a report from Academia ‘Telecom Industry – Global and Indian perspective’, the telecoms industry in India is characterised by cut-throat competition and has one of the lowest ARPU. This is evidenced by subscriber ARPU falling from US$7.62 in Q12010 to $5.31 in Q32014.

Out of India’s population of 1.2 billion, today there are 63.6% of citizens without a mobile subscription. The country has a huge number of connections, standing at 959.7 million as of Q12015. There are 164.4 million smartphones, equating to a total of 17.4% smartphone adoption. Despite this figure, 795.2 million are connected through a feature phone. A great deal of development in the sector has taken place, but there is clearly still room for future growth.

OTT players have grown exponentially in the country, with India’s Financial Express reporting in 2014 that 52% of those using OTTs communicated regularly through WhatsApp, totalling 48 million users.

Research from Capgemini estimates that 65% of internet users in India have their first internet encounter via mobile. Predominantly, India has become a ‘mobile first’ generation of internet users. Combining the volume of mobile internet users and costly data upgrades, Indian subscribers are not experiencing the full potential of the Internet.

If facing revenue loss from internet services wasn’t enough, this is further impacted upon by Operators struggling to maintain spectrum. Recent auctions have shown the mass demand and expense Operators must face when obtaining spectrum.

Spectrum Auctions in India
Mobile Operator Vodafone has recognised setbacks in India’s mobile development strategies, particularly mobile spectrum. CEO of the Vodafone Group, Vittorio Colao said in 2014 that “the problem is that in India there is a misconception of the value of spectrum. The reserve prices are set too high. India has very low prices and very low revenues, so we cannot afford to pay high prices for spectrum.”

A recent spectrum auction saw India’s biggest Mobile Operators buy bandwidth for extortionately high prices, rising to 1.7 trillion rupees, equating to US$17.7 billion. According to The Times of India, the auctions are “crucial for top Operators like Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications as some of them are completely losing the coveted spectrum in quite a few key circles and thus will have to necessarily buy in this round to maintain continuity of business.”

It is apparent that new initiatives need to be introduced to ensure spectrum in the country can support advancing technology. The main impact from limited spectrum is that an increasing number of subscribers are looking for alternative communication methods. India must address this, however, regulations are restricting mobile development.

Heavily regulated market poses threats
Regulatory framework implemented by the Telecom Regulatory Authority of India (TRAI) will contribute a great deal to the future environment for service providers. In March 2015, TRAI began preparing its regulatory structure for internet style communications services such as Skype and WhatsApp. TRAI secretary Sudhi Gupta stated: “Worldwide, there is an ongoing debate among governments, industry and consumers regarding regulations of OTT services and NET-neutrality.”

The TRAI consultation reported in December 2014 that India’s SMS traffic had fallen from 534.6 million in June 2013 to 436.7 million in June 2014 (18.3%), due to OTT services. Government initiatives are being introduced to provide further opportunity for Mobile Operators to benefit and stabilise their market position.

Clearly, Mobile Operators in India are under a great deal of pressure. From observing these issues, it becomes apparent that the country’s mobile sector needs an alternative solution that will boost ARPU, return lost revenues and enable future mobile developments. Experiencing numerous setbacks through declining SMS rates, obtaining spectrum and heavy regulatory threats, Indian Operators must now make their stand within the telecoms sector.

The Future of Business in India
In 2009, only 6.9% of workers had access to a smart device. By 2015, this figure had grown to 64%. Subsequently, mobile enterprise will increase in prominence and become a necessity for those in business through a number of mobile subscribers becoming progressively “comfortable with online content consumption, social networking and e-commerce” as reported by Salesforce.

This presents a good opportunity for enterprise capabilities to grow exponentially. The possibility of enterprise becoming a feasible service in India, creates an exciting opportunity that will enable mobile enterprise to become more accessible to the masses. This will not only benefit the growing number of mobile subscribers, but will bring a great deal of positives to the business world, as well as the country’s economy.

Many enterprises support the Bring Your Own Device (BYOD) policy, whereby employees can access, manage and share company files on their smartphone. According to Forbes, 49% of users claim they are more productive when using their own device. With the majority of Indian’s utilising feature phones, Mobile Operators can develop enterprise capabilities on the original network, stemming new business initiatives across India.

Operator Strategies
There are numerous strategies Mobile Operators in India can adopt to create brand new opportunities within the telecoms sector. Consumer demands for mobile data has encouraged smartphone penetration to soar, however there remains a large percentage of unconnected mobile users without access to the Internet.

By adopting these strategies, Mobile Operators will add momentous value to their existing business, including:

• Utilise Voice and SMS portion of the existing mobile network
• Simplify and delight users with an internet style experience on their standard Voice/SMS networks
• Regain revenues lost to OTT services
• Offer attractive fixed price subscription plans to attract new subscribers
• Device universal
• M2M and Enterprise capabilities over standard Voice and SMS

There is an increasing need for reliable connectivity, capacity and coverage to manage the volume of data and additional subscribers. There are approximately 240 million data users in the country, including 55 million from urban areas and 185 million from rural regions, yet the Internet’s success in fostering innovation has resulted in increasing pressure and competition for Operators.

Alternative Solution Required
Mobile Operators need an alternative solution to provide users with an equal opportunity, thus positively practising NET-neutrality. Operators can offer a set of attractive internet style services using standard Voice and SMS capabilities to enable users on any mobile device to access similar capabilities for a fixed price. Internet style services through the core network will cater to a larger audience and ensure connectivity for the masses.

Building a reliable network infrastructure to host online content requires substantial investments made by the Operator. An innovative, cost efficient service beneficial to both the Mobile Operator and their subscribers is clearly necessary. Introducing membership models and subscription tiers will allow the Operator to explore new markets and focus on improving existing features that do not require the Internet or changes to infrastructure, easing the pressure on the Operator.

In addition to improving SMS and voice capabilities, a service could be created that will change the face of India’s business sector. Operators can collaborate and expand business through providing a universal set of enterprise services to companies and businesses through the mobile network.

In doing so, new opportunities will be created for the untapped portion of the mobile market by providing the same services, available on any mobile device. This will ensure an equal mobile experience for India’s 464.7 million subscribers and for the remaining unconnected citizens.

There is also the potential for M2M opportunities to gain prominence in the Indian telecoms sector. These capabilities will greatly benefit mobile health and education, thus contributing to India’s future economic growth and connectivity.

Furthermore, telecoms now has: “the capacity to be a connecting platform between the government and citizens”, as stated by CEO of Infosys, Vishal Sikka. The ability to improve connectivity when needed most will significantly enhance the efficiency of the Indian government, and the support of a region post disaster.

Ensuring interaction between the Government and its citizens is crucial. Operators must adopt a tool that can overcome connectivity boundaries. Industry leaders such as Vishal Sikka have recognised the importance technology has in times of disaster. Developing a reliable network could enhance current government strategies and revolutionise future efforts during a major incident.

The Mobile Operator has an endless number of strategies they can adopt in order to enhance their revenue streams, ARPU, subscriber base and stabilise their position within the mobile market. Ultimately, this will ensure connectivity and accessibility for all mobile subscribers in India.