Mobility

July 27, 2006
Market Trends for Mobile Phones in India

Rajiv Khanna

NEW DELHI -- The mobile phone industry in India has been witnessing huge growth for the last three to four years, and this trend is likely to continue. This growth has been fuelled by the astronomical drop in call tariffs, growth in disposable incomes and new product launches that are similar to those available in the developed economies of Europe and America.

Even today, with approximately four to five million new subscribers being added every month, the total population in India covered under cellular networks is still not more than 30 percent. What will happen when this increases to 50 percent and above? Here lies the potential and the opportunity in India for all the cell phone manufacturers and operators.

The Indian consumer

Today, mobile phones have not only become a necessity for the Indian consumer, but rather an extension of his personality. Gone are the days when a mobile phone was meant for voice communication alone, Indian consumers are now looking for more features in their handsets, like MMS, ringtones and music. Also, the consumers want their phone to do all the things they want while they are on the go: playing music, taking videos, downloading games, surfing the net, “MMSing” etc, which have become the “in” things today.

With new phones being launched faster than you can say ‘new’, the Indian consumers have been found to be ready to experiment and inclined to replace their phones in less than six months. Markets in most of the European countries are reaching saturation level, while Asia, with two big markets like China and India, is witnessing huge growth. Currently, China is the worlds’ largest market of mobile handsets, followed by India.

The Indian market is poised for another big leap with all the major operators expanding to rural areas. The next few years is going to very exciting and interesting for the Indian cellular industry.

Technological evolution

The cellular operators in most of the European countries have moved to 3G network. India will also be moving on to the 3G network, sooner than we expect, and this would make video streaming and videoconferencing possible in India with a 3G phone. The days are not far when you can watch your favourite soap operas on your phone!

Data connectivity using GSM data (CSD/HSCSD) or GPRS /EDGE are the latest in the Indian Market. The data connectivity speed, which used to be 9.6Kbps to 14.4Kbps, has got advanced to 115.2Kbps to 300Kbps (EDGE). Surfing on the net using your phone has now become as fast as a LAN connection or Wi-Fi.

The mobile phones in the market have ushered-in a technological revolution. Phones with Bluetooth, more than 1GB storage space, expandable memory, more than 2 mega pixel inbuilt digital cameras with video shooting, telephony capabilities, etc. have hit the market.

We are witnessing a convergence of mobile communication with IT. Your mobile phone has almost become your office tool. Smart phones with windows mobile OS, Wi-Fi support, LAN support, etc. are examples of this convergence. Let us take a look at the current usage pattern for an external/expandable memory in the phone. Earlier, phones having MP3 playing capacity used to have 10 to 20MB shared memory. Today, there are phones which have minimum 64MB user memory and some with 1GB to 4GB hard drive for music, and in addition, the capacity to expand by using an external memory card. So, a customer who wants to buy a MP3 phone, expects the phone to have a memory card. The memory card sizes have also reduced with the introduction of Micro SD/T-Flash cards.

Vey soon, all I would be carrying with myself is a mobile phone. This phone will act like a laptop in my office, like a TV when I want to watch the news, like a stereo system when I want to get entertained, will be foldable when I want to keep it in my wallet. My office will be moving with me in my palms.

(The author is the CEO, India operations, Meridian Telecom)