Sky's the limit for mobile data sales in India
By Siddharth Srivastava
NEW DELHI - Recently, Indian Idol, a reality talent-hunt show licensed from the American Idol format, selected a new winner on Sony Entertainment Television. While the program was an instant hit, the surprising factor was the large number of people who chose to vote by short message service (SMS) - more than 55 million during a five-month voting period, generating revenue of more than US$4 million divided between telecom companies and Sony.
Indeed, with the number of Indian mobile-phone users set to cross 100 million before the end of this year, the number and variety of businesses being woven around the gadget continues to amaze. In the fray are media companies, telecom operators and more
< = =text/> < = src="https://goldsea.com/GAAN/adjs.php?n= 061320521&what=zone:117&block=1&exclude=,&referer=http%3A//us.f370.mail.yahoo.com/ym/ShowLetter%3FMsgId%3D6992_195293_3852_1513_987_0_2827_-1_0%26Idx%3D2%26YY%3D41478%26inc%3D25%26order%3Ddown%26sort%3Ddate%26pos%3D0%26view%3Da%26%3Db%26%3DIn" =text/> 
than a half-dozen aggregators (mobile content or mobile solutions companies) offering a host of data services such as contests, ring tones, weather forecasts, games, banking and astrology services and m-commerce. The subscriber base is expected to grow to 300 million by 2010. The cellular industry crossed $1.5 billion in revenues in the financial year 2003-04.
In Europe, with its widespread mobile-telephony usage, the mobile-data sector accounts for a healthy 10-20% of most operators' revenues (the operator's share is just one part of the mobile-data market). In South Korea and Japan, it forms 20-25%. In India, it is between 7% and 10%, which is a level that China reached when 20% of the population had mobile phones. India has reached the same level at only 10% penetration. Based on these figures, Lehman Brothers estimates mobile data will be a $10 billion market in India by 2010.
On average, a mobile handset is used for less than one hour in a day for voice communication (incoming and outgoing calls) compared with more than an hour a year ago. But SMS usage has increased. This is due to various downloads such as ring tones, bill-related information, contests, exam results and messages received from public services such as banks, railways and airlines.
Lehman Brothers estimates that a market of close to $1 billion linked to cellular phones has already been created in India. Last year, the Indian music industry earned more than $35 million, or 20% of its revenues, from mobile music. Media houses such as Star, Sony and BCCL have formed separate divisions to tap into mobile content. Star chief executive officer Peter Mukerjee has said that mobile telephony should eventually bring in 30% of that company's revenues. While it took the print media 128 years to achieve a target audience of 50 million subscribers, it took mobile communications just 10 years to reach a similar target. Aggregators Activemedia Technology, Mobile2win and Hungama link media and mobile companies.
In 2005, the number of legitimate music-download sites reached 335, up from 50 two years previously. In just two years, the volume of music made available online by record companies has increased more than sixfold, to more than 2 million songs, according to the International Federation of the Phonographic Industry's 2006 Digital Music Report. Mobile music downloads in the Indian market are currently valued at $50 million, according to Soundbuzz India.
Royalties worth about $15 million were paid to the music industry in the past 18 months. According to Shridhar Subramaniam, managing director of Sony-BMG, "A hit film can generate about 5% or more of an album's sale - on mobile revenues.''
About 400,000-500,000 ring tones are downloaded daily. Internationally, the size of the market for mobile ring tones is estimated to have grown from $450 million in 2003 to $1.5 billion in 2004. In India, though, the ring-tone market still stood at a modest $6 million in 2003, but is growing at more than 50% annually.
Moving on from music, it is estimated that an Indian mobile gaming market that generated $30 million in revenue in 2004 will rise to $336 million by 2009. The latest National Association of Software and Service Companies report on the segment concurs. The association has said that India could earn as much as $500 million in exports by 2010.
According to a report by industry consultant ARC Group, worldwide mobile entertainment revenues are forecast to grow to $25 billion by next year, driven by the games sector. In the Asia-Pacific region alone, mobile gaming is expected to generate nearly $2 billion in revenues by 2008. In East Asia, mobile gaming has generated more than $850 million.
Over the past year, wireless games topped the list of entertainment applications downloaded to cellular phones. It is expected that the number of wireless gamers will grow from 7.9% of all US wireless subscribers in 2003 to 34.7%, or 65.2 million users, by 2008. Mobile gaming is set to generate $1.9 billion in yearly revenue in the US by 2009, up from $204 million in 2004.
The growth of gaming in India was initially restricted by the prohibitive cost of handsets. However, today Java-enabled handsets (a requisite for gaming) are available for less than $50, and users, especially young ones, are willing to experiment with new games centered on local themes such as Bollywood (India's film industry) and cricket.
Big bucks are expected on what has been termed as "adver-gaming", a format where the user is provided the complete brand experience as well. Thums Up (an Indian cola brand) has a game designed with Mobile2Win; Castrol has its own ring tone (100,000 people actually downloaded it); while Star launched "mobisodes", one-minute clips of its popular comedy show The Great Indian Laughter Challenge.
Mobile-commerce is another area receiving attention. Recent Internet and Mobile Association of India figures estimate that the size of the Indian e-commerce market will cross $600 million by 2006-07, a nearly 100% increase over last year and more than 300% over 2004-05.
Indeed, many market analysts believe that the potential is yet untapped. India's telecom-industry boom is led largely by cellular telephony, although growth of land-line phones and Internet connections are on the upswing, though not at the same pace.
More than 90% of the phones added in 2005 were mobile phones, with the share now more than 50% (60 million) of total connections (more than 110 million), with private players (Tatas, Hutch, Bharti Airtel, Reliance) having contributed more than 88% of the total addition during the period. Monthly additions of cell phones have grown exponentially, from 50,000 in 1997 to 1.4 million in 2003 and a record 4.5 million in December 2005 (due to the launch of services that guarantee a phone number for life for just over $20), which is the monthly addition level of China.
India is considered to be a ripe market, as less than 40% of the country's total area is covered by mobile networks, and fewer than eight in every 100 Indians use mobiles, compared with 30% in China. The scope for growth and expansion is immense.
Siddharth Srivastava is a New Delhi-based journalist.
(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about and .) | | | | | | | | |
Ringback tones popular for business (May 9, '06)
Mobile phone rebound expected by year-end (Mar 6, '06)
Twelve billion SMS messages during festival (Feb 9, '06)
Global handset majors answer India's call (Oct 20, '05)
| | < =text/> < src="https://pagead2.googlesyndication.com/pagead/show_ads.js" =text/> < name=google_ads_ marginWidth=0 marginHeight=0 src="https://pagead2.googlesyndication.com/pagead/ads?client=ca-pub-8035131061123126&dt=1147276439640&lmt=1147258020&at=120x600_as&output=&url=http%3A%2F%2Fwww.atimes.com%2Fatimes%2FSouth_Asia%2FHE11Df01.&color_bg=FFFFFF&color_text=000000&color_link=0000CD&color_url=FFFFFF&color_border=FFFFFF&ad_=text_image&ref=http%3A%2F%2Fus.f370.mail.yahoo.com%2Fym%2FShowLetter%3FMsgId%3D6992_195293_3852_1513_987_0_2827_-1_0%26Idx%3D2%26YY%3D41478%26inc%3D25%26order%3Ddown%26sort%3Ddate%26pos%3D0%26view%3Da%26%3Db%26%3DIn&cc=280&u_h=768&u_w=1024&u_ah=738&u_aw=1024&u_cd=32&u_tz=-420&u_java=true" Border=0 width=120 scrolling=no height=600 allowTransparency></> | | |
Kyunki Saas Bhi Kabhi Bahu Thi 2
Current Affairs
Seher Hone Ko Hai
