Mobile Telephony-Imp. Inf. By ashok Hindocha(M-9426201999)

Ashok Hindocha-M-9426201999
www.bsnlnewsbyashokhindocha.blogspot.com
Technologies
Mobile telephony
The Indian mobile telephony market has seen unprecedented growth. Carriers are rapidly expanding into rural markets, which will drive the next wave of usage. By Nivedan Prakash
Mobile telephony was introduced in the Indian market in the mid 1990s. In the last few years, this sector has witnessed tremendous growth—close to 12-14 million new subscribers are added per quarter. Also, the mobile segment has welcomed new players every year. Earlier, mobile telephony was categorized into WLL, CDMA, and GSM, but now with the arrival of 3G mobile technologies the market dynamics are set to change.
The Indian mobile telephony market has come of age from 0.2 million subscribers in 1996 to 362.30 million as of January 2009. India’s telecom networks serve over 400 million subscribers. In March 2009 alone, 15.87 million telephone connections (wireline and wireless) were added—and that tells its own story. With this growth, the overall teledensity is now stands at 37%.
The total wireless subscribers (GSM, CDMA and WLL (F)) base stood at 391.76 million at the end of March 2009; as for the wireline segment, the subscriber base increased to 37.96 million. According to PricewaterhouseCoopers, India had 390 million mobile subscribers in March 2009—accounting for 90% of the overall telecom access subscriber base in the country with the rest being fixed service subscribers. GSM-based services account for nearly 75% of the total mobile subscriber base, with CDMA-based services constituting the balance.
Voice remains the favored application of mobile phones but in developed markets with 3G and HSPA, data services are picking up with the availability of relevant content and affordable handsets.
Additionally, the demand for smartphones is rising at a rapid pace and it is believed that it will double in the next three years. Rich features such as camera, Bluetooth and multimedia are expected to become mainstream applications in lower end or mid range mobile phones, as consumer adoption increases and device cost decreases. This trend is also likely to be led by the fact that high-end phones will become more advanced with the use of desktop-like graphics and video capabilities.
Anil Gupta, Managing Director–ARM India, commented, “ARM believes that multimedia will become an increasingly important part in a consumer’s mobile phone, and the need for flexible and scalable multimedia solutions is rising. We are working with leading silicon partners, device manufacturers and content providers in the gaming and graphics industry to introduce an extensive range of ARM Mali GPU-enabled mobile phones and consumer devices to the market, with immediately available console-quality mobile gaming content, stunning user interfaces, advanced navigation applications and Web browsing. Mali graphics from ARM is shipping in over 80 million handsets worldwide, and sparking off a new chapter in the mobile phone industry.”
India too is witnessing a trend where mobile phones are converging with lifestyle and with the rollout of cheaper and efficient voice and data services such as 3G, this convergence is happening now.
While there are many trends in the telecom space, mobile applications have become central to entertainment, information, banking and other services. VAS has redefined mobile telephony by allowing multiple platforms such as mobile Web, Widgets and mobile applications to co-exist and bring forth a host of benefits to the end-user. From knowing the rates of vegetables and grains in the market to accessing social networking sites, and to keeping in touch with friends and family—the scope of VAS cuts across segments and social demarcations.
“In our view, the global market is witnessing a huge change. Earlier it was operators, now it is MVNOs [Mobile Virtual Network Operators] that are coming out in the market to attract even a small segment of customers. For example, there is an MVNO in France that attracts ethnic groups. More people are accessing social networking sites on phones,” added Debasis Chatterji, CEO, Netxcell.
It is not just the growth story that is interesting. The average use of mobile phones in India is the highest at 287 minutes a month. India’s mobile subscriber base is exceeded only by China.
Increased affordability (due to continuous decline in tariffs, handset prices and reduction in subscription costs) and greater availability (with rapid expansion in coverage and wider distribution network) of mobile services, has fuelled this rapid growth.
Lloyd Mathias, Chief Marketing Officer, Tata Teleservices, pointed out, “I think telecom is the biggest successes in India’s liberalization. A collaborative ecosystem enabled by proactive government policies, aggressive telecom service providers; handset and device manufacturers have lowered the cost of telephony for the masses. This has fuelled growth.” The other aspect is the the fact that teledensity in India is still under 40%.
Most urban markets are reaching saturation levels. It is vital for mobile operators to focus on rural markets for subscribers. At the same time, the government is also supporting the operators in their efforts to penetrate further asserted Chatterji.
Moreover, our country has the lowest mobile tariff in the world, which is also driving the growth of this market. To a large extent, the price factor is also playing its role.
Arpita Pal Agrawal, Associate Director–Telecom Practice, PricewaterhouseCoopers, commented, “Given the high price sensitivity of Indian consumers, low mobile tariffs have certainly helped in addressing the marginal customer base whilst encouraging increased usage of mobile services by existing customers.”
Issues hindering the growth of mobile telephony
Regulations and restrictions on spectrum have actually curtailed the evolution of mobiles from basic communication devices to information enablers. At a time when India could have embraced innovations on mobiles such as video telephony, we are still grappling in making decisions on spectrum allocation
While this is a regulatory issue and concerns the government authorities, private telecom and OEMs involved in influencing the government authority’s decision too need to come to a consensus and collaborate for the larger benefits of the country
There is still a large urban/rural divide aggravated by poor rural infrastructure, too many licensees and potentially not enough spectrum
From the policy perspective, there is a lot of work to do, especially on spectrum management and also on spectrum policy because it is unclear. There is a overall need for a predictable policy framework so that operators can better plan and manage their business case here
The poor availability of telecom backbone infrastructure further impedes the growth


Push from liberalized policies
Liberalized policies have ensured lower tariffs and reduced roaming rentals in the process leading to increased usage of mobile phones. The government has consciously reduced the ADF, introduced norms like free incoming calls along with lifetime free prepaid, which made this growth a reality.
Here we can say that the telecom sector has been the poster child of liberalization and policy reforms in India. The government’s policies and decisions though not always directionally consistent have resulted in unprecedented market growth and expansion. Post the sector liberalization in 1994, the major change brought about by the policy was a move from a fixed license fee regime to a revenue sharing license regime, which provided relief to operators from the large upfront payments that they had committed to earlier. Later, introduction of new licensees resulted in increasing competition and the consequent fall in tariffs.
The implementation of other policy/regulatory initiatives such as Calling Party Pays regime (CPP), increase in foreign investment limits to 74%, implementation of the Unified Access Licensing regime (UASL), usage of Universal Service Obligation (USO) fund for expansion in rural areas, gradual phase out of Access Deficit charge (ADC) and low termination charges have together contributed in driving market expansion and subscriber growth rates.
“The more recent introduction of active network sharing, the upcoming introduction of mobile number portability, and the imminent 3G spectrum auctions should help further growth, innovation, and competition,” said Agrawal.
We would also like to mention that the service providers as well as equipment manufacturers are contributing towards this growth as well. Service providers are fueling growth with increased coverage and lower tariffs along with lucrative schemes and plans like life-time validity plans and reduction in pre-paid recharge coupon size facilitating low income users to sign-up and stay on the network.
“Both service providers and equipment manufacturers are constantly working toward creating smarter and leaner technologies and offerings—which is where you see the industry evolving from vanilla voice, to voice and SMS, data, lifestyle services, convergence with other functions such as photography and MP3 music and video players, and so on,” pointed out Mathias.
Another important player in this growth story are mobile handset manufacturers who have contributed by introduction of a variety of low cost entry handsets that have enabled the operators to reach their services to the mid to lower income segment of population. Further, the wide array of affordable, feature rich handsets enables the various customer segments to choose handsets per their individual requirements and aiding this sector’s growth.
In established and developed nations where telecom spectrum is almost in sync with the innovations on the mobile hardware side, consumers leverage almost every single possible feature invented in a mobile till date (TV, video, high-end gaming for example). If spectrum allocation issues are solved in India, we can expect a boom in the adoption of such features by Indian consumers.
Consumers are also eagerly anticipating a movement from simple smartphones to Mobile Internet Devices (MIDs), especially with the constant need to be connected to our blogs, Twitter, Facebook, and e-mail. The coming years are all going to be about 3G and what that can do for the market, both for enterprises as well as individual telecom subscribers. We will all witness the power of 3G soon and its fantastic data transfer capabilities will redefine telecom.
According to PwC, the expansion in the mobile subscriber base will continue as per government targets, but at a slower pace post 2009-10. It is expected that further growth will come from category B and C circles, with the pace of net additions in rural areas likely to outpace those in urban areas. Growth will be driven by expanding coverage, decreasing cost of subscription, facilitative regulatory policies and a growing trend towards multiple subscription ownership. This will be achieved by operators adopting innovative, low-cost operating models and groundbreaking infrastructure sharing arrangements. Voice will be the mainstay of revenues with specific customer segments adopting niche VAS as per their needs.
In the future, operators would push for selling more value added services to existing customers, reaching out to rural and remote areas, achieving internal cost and operational efficiencies to be able to offer cheaper tariffs and finding innovative ways to achieve differentiation in a cluttered market.
nivedan.prakash@expressindia.com


ashokhindocha-Rajkot
M-9426201999
http://ashokhindocha.blogspot.com