India's mobile services industry to grow by 8 percent, but remain a speck in global market

The smartphone boom has also helped spur the growth of the mobile services market, which is fast becoming an important part of the whole experience.

Growth in this sector has been rampant over the last couple of years and research firm Gartner’s latest report on the market says there is expected to be an 8 percent growth and the worth of the industry will rise to Rs 1.2 trillion in 2013. Just to give you a idea of the global industry, India’s mobile services revenue is a mere 2 percent of the world revenue.

The revenues from the mobile services were Rs 1.1 trillion in 2012. Gartner revealed that the mobile connections in India would grow to 770 million in 2013, an 11 percent increase from 712 million connections last year. “India has a phenomenal pent up demand for mobile broadband and local mobile apps that solve everyday problems for consumers,” Gartner Principal Research Analyst Shalini Verma said.


India's mobile services industry will pick up more pace this year


However, the report does warn that the mobile market would keep facing challenges till the average revenue per unit (ARPU) does not grow at a quicker rate. Verma explained that in case the status quo in the telecom sector did not change, India would account for 12 percent of global mobile connections, but merely 2 percent of overall revenue, a lean cut indeed.

The main challenges facing Indian telecom service providers is growth of the profit margin as well as competition with the likes of Whatsapp and Facebook Messenger, which are eliminating a chief source of income for the telecom providers. “As mobile voice services continue to get commoditised in the country with the increased use of voice over IP (VoIP) and the probable termination of national roaming charges, mobile broadband is the area of opportunity for operators,” said Verma

A key area of development for telecom providers is video and social media services, where they can seamlessly insert themselves and take a cut of the ad revenue. This is a more viable solution than rapidly expanding the services to rural areas hitherto untouched, as it provides a revenue stream and is less of an expense to undertake. However, the rural expansion of services will contribute greatly to the overall industry and open up new audiences and must not be put on the back-burner either.

Published Date: Apr 22, 2013 08:59 pm | Updated Date: Apr 22, 2013 08:59 pm